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Adelaide market buzz: Rising prices and buyer competition
Investors and first-time buyers have been fueling the Adelaide market, pushing property prices to record highs in October, with the market showing no signs of cooling down.
October marked the 10th consecutive month of growth for home prices nationally as most capital cities reached record highs amid renewed momentum, according to the latest PropTrack report.
PropTrack’s Home Price Index showed national home prices rose 0.6 per cent in October and 7.5 per cent over the past year, adding roughly $65,200 to the median home value, now at $858,000.
Similarly, the combined capital cities saw a 0.6 per cent rise in October and a 7.4 per cent year-on-year increase, with growth over the past five years reaching 47.0 per cent.
Adelaide and Brisbane led the monthly growth across the capitals, increasing by 1.2 per cent and 0.9 per cent, respectively, while Sydney, Perth, and Hobart all rose by 0.6 per cent.
Similarly, Darwin and Melbourne recorded a 0.5 per cent uptick.
Ouwens Casserly property consultant and auctioneer Daniel Richardson said Adelaide’s price growth has been approaching COVID-19-era levels, driven by a surge in demand.
“Just this last weekend alone, we had four auctions, personally, just within my team, all of them sold over reserve. It's really quite interesting to see what's happening with prices at the moment,” he said.
He also noted that there has been increased competition among buyers at auctions, which correlated with the government’s expansion of the 5 per cent deposit scheme at the start of October.
“The average number effectively at open inspections really hasn't changed across the company since last year, but I guess the numbers of interested parties attributed to that group are significantly higher."
Richardson said that the price increases were right across the board, with some properties in the premium end of the market transacting for $3 million or more, including off-the-market properties.
“We're seeing a significantly higher number of properties sell off-market through our off-market platform; they're actually paying us what we consider to be premiums to keep properties off the market,” he said.
Despite most capital cities reaching new record highs in October, Hobart and Canberra saw a decline of 3.9 per cent and 1.0 per cent below their peaks.
While Adelaide recorded the highest monthly gain for October, the city also recorded an annual 10.3 per cent growth.
Over the past year, Darwin, Brisbane, and Perth led capital city gains with rises of 12.8 per cent, 12.6 per cent, and 11.8 per cent, respectively.
On the other end, Sydney, Melbourne and Canberra grew slower, recording an annual growth between 2.7 and 6.4 per cent.
Similar to the capitals, regional prices climbed 0.6 per cent in the month of October, but surpassed the cities year-on-year with 7.9 per cent growth compared to the capitals’ 7.4 per cent
Additionally, the regions also outpaced the capitals’ growth in the past five years, with an increase of 64.2 per cent compared to 47.0 per cent, driven by relative affordability and lifestyle appeal.
According to REA Group senior economist Eleanor Creagh, the new competition in the market has been fuelled by increased borrowing capacities, lower mortgage rates and improving sentiment.
She said that looking ahead, the year’s rate cuts, population inflows and the 5 per cent Home Guarantee Scheme will continue to bolster demand.
“With stock on market constrained and new supply challenged, conditions remain tilted toward sellers. The market appears set for further price gains throughout spring and into summer,” she concluded.
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