How does an economist view Labor’s housing plans?
Saturday’s (21 May) federal election brought with it a new government, with the Albanese-led Labor party winning power...
Despite a turbulent 2020, Adelaide’s property market remained largely resilient and welcomed the new year with strong momentum.
Unlike other capital cities, Adelaide experienced an average growth of 5 per cent in 2020 despite the effects of COVID-19. With affordability and interstate interest driving demand, the strong results are expected to be replicated in 2021.
The Property Nerds co-founders Arjun Paliwal and Kent Lardner believe that the Adelaide property market will definitely remain in the spotlight for some time.
In their recently released Australia’s Top 20 Investing Regions for 2021 report, the duo named the region of Marion as one of the top 20 property hotspots in Australia.
Marion is located around 10 kilometres south-west of the city centre, with a population of over 93,000 residents as of the 2019 census.
According to Mr Paliwal, who is also head of research at InvestorKit, Marion checks all the boxes in terms of data-driven property research – building approvals, inventory levels, days on market, vacancy rate, rents and rental yields.
“It’s fairly affordable. Inventory levels are low and have been getting lower … The Marion region has inventory levels … that are still trending down from 12 months ago, with a 23 per cent decline. It’s now at the low levels that we are expecting price growth to intensify.
“Then things are starting to sell quicker. It’s extremely easy to find a tenant due to the low vacancy rates. Rental yields are pretty healthy, and rents are increasing,” Mr Paliwal said.
In terms of building approvals, Mr Lardner, director of Suburbtrends, added that the unique geography of Marion, given its natural boundary, also drives its appeal.
“If you do a 360-degree radius around some areas, you can say, ‘There’s a lot of land that’s going to become available’. But other areas are adjacent to water, or a valley, or a mountain range, and they, too, have a tendency to impact the future pipeline supply. That’s always a standout.
“Sometimes when we’re measuring inventory or building approvals, we look at that and say, ‘Well, what’s the potential future hold here? Is there going to be an untapped reserve of land that’s suddenly going to open up?’” he explained.
Additionally, the location’s demographics, household income, jobs and housing prices impact its performance.
Mr Paliwal noted that while Marion does lie outside of the city, it offers proximity to the CBD business districts as well as the northern suburbs.
With more people now able to work from home, many homeowners and aspiring property buyers are seeking value over mere proximity to the city centre, thereby driving demand across inner-ring suburbs and even beachside suburbs.
“People will consider even houses that don’t probably look in the best shape just to be in those areas,” according to Mr Paliwal.
Ultimately, Marion’s diversity and layout offers something for everyone, making it a hotspot in the “new normal”.