South Australia remains subdued, though Adelaide is beginning to attract investors’ attention
The Adelaide market has traditionally been moderate, with steady but unspectacular growth rates. Over the past year, RP Data reports Adelaide prices have risen by just 2.9 per cent.
Prices in the city are the most affordable on the mainland, according to Residex. Families in the city would need to devote just 29.21 per cent of their income towards a mortgage on a median-value property.
BIS Shrapnel has a pessimistic outlook on Adelaide’s growth prospects. According to an analysis by the firm, demand is slowing in the city due to weak migration figures. While supply is currently meeting demand and prices are improving, weak economic conditions may be deterring interstate migrants.
According to BIS Shrapnel, prices in the city are likely to grow by just five per cent to 2017. When adjusted for inflation, this is likely to mean a four per cent decline in real terms.
Then again, other analysts are predicting Adelaide may begin to take off in coming months. Todd Hunter from wHeregroup predicts the city may be poised for a comeback, citing affordability and desirable lifestyle factors as major drivers.
Terry Ryder from Hotspotting.com.au believes the market will become a “growth leader” over the next year. He points to raised sales volumes as an indicator the market is gathering speed.
According to RP Data, Adelaide has the second highest growth in house sales over the past year, with volumes up 13.6 per cent. By contrast, unit sales climbed by only 2.4 per cent.
The highest capital growth in Adelaide was found in Cheltenham, where house prices increased by 21 per cent, Residex found. For units, St Peters came out on top, with a 16.21 per cent increase in price.
In regional areas, growth has been limited. Over the past year, the median price for country South Australia fell by 0.37 per cent, according to Residex. Meanwhile, RP Data reported 17.4 per cent of re-sales in regional areas of the state result in a financial loss for the seller. The south-east region was the worst – up to 19.4 per cent of vendors in this region lose money on their sale.
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