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While Adelaide’s housing market isn’t quite as flush with cash as Sydney or Melbourne, there are still plenty of reasons for property investors to take notice.
Data from PRD’s latest Affordable Living Property Guide suggests that Adelaide may be a fruitful option for those looking for a more affordable entry point into the metropolitan market.
In line with broader market trends, PRD found that Adelaide’s median property prices grew 9.5 per cent from the first quarter of 2020 to the first quarter of 2021. Across the same period, median property prices for units also rose by 2.8 per cent.
Complemented by an increase in total sales of 23 per cent for houses and 27.5 per cent for units, PRD predicted that this should fuel owner-occupier confidence going forward.
With house rental yields of 4.2 per cent in March 2021, PRD called Adelaide an attractive alternative for investors daunted by the high metro prices in other states.
PRD noted that median rental prices for houses have increased by 10 per cent over the last 12 months.
“Vacancy rates in Adelaide Metro remained well below Real Estate Institute of Australia’s healthy benchmark of 3 per cent, even throughout COVID-19,” the report noted.
On the other side of the table, PRD’s latest report noted that the majority of Adelaide’s affordable and liveable suburbs are located on the north side and middle ring of the Adelaide CBD.
As with PRD’s other reports on affordability, the key detail here is the difference in price between properties located within Adelaide’s Metro area and liveable suburbs within a 20-km radius of the CBD.
By adding that number to the price of an average SA home loan and then cross-referencing it with housing data to identify which suburbs offered a median price below that of the Adelaide Metro area at large, PRD arrived at a shortlist of affordable suburbs.
Factoring in additional criteria like liveability, infrastructure investment and broader trends, PRD held up Valley View, Hope Valley and North Field as their suburbs of choice when it came to houses.
Hope Valley was also shortlisted when it came to PRD’s picks for the most affordable and liveable suburbs for units. With a median price of $310,000, PRD called it “a highly attractive investment opportunity due to it having the lowest price of entry out of the three affordable and livable suburbs chosen”.