7 Things You Need To Know About Adelaide’s Property Market Right Now

Adelaide’s property market has proved remarkably resilient in the face of Covid-19, and in fact, is stronger than ever. Here are the key trends affecting buyers and investors in the South Australian capital.  

Surge in Property Prices

Property prices in the South Australian capital have jumped dramatically since the start of Covid-19. As reported by Domain, Adelaide has experienced the strongest annual property price increase since 2008, at just over 20%. The median property price now sits at $667,888 for houses and $357,615 for units, jumping roughly 5% over the past quarter, as interest rates remain low and banks are still keen to lend. Properties in the city’s east and inner-south have experienced unprecedented growth and continue to lure wealthy investors.

The Lifestyle Factor

The lifestyle appeal of regional areas has shone a spotlight on suburbs previously dismissed. Investment in holiday rentals has meant regional areas such as Victor Harbor have seen prices rise more than 20% over the past year. Regional South Australia has seen a steady rise in sales activity, with coastal towns representing significant price growth. The suburbs of Victor Harbor including Port Elliot, Encounter Bay and McCracken are being sought-out by city siders for their idyllic and relaxed lifestyle. The continued working from home trend has added value to outer suburbs, as it becomes less important to be close to the CBD.

Influx of New Buyers

While price growth in Adelaide has historically lagged behind other Australian capitals, it has recently seen an influx of interstate buyers looking to relocate from the eastern states. Adelaide has risen the ranks of the world’s most liveable cities, taking the nation’s top spot from Melbourne. Coming in third on the global index, Adelaide achieved perfect scores for healthcare and education. This has fuelled strong demand from homeowners and investors, with a shortage of properties in turn pushing up prices. Foreign buyers are also likely to return to the market as international borders open.

Good News for Units

While some of Australia's capitals saw city unit prices plummet during the Covid-19 pandemic, Adelaide's unit prices have reached a record high. Units in high-rise suburbs across Sydney and Melbourne saw rising vacancies, largely due to closed international borders, with vendors being forced to resell at a loss. It’s been a different story in Adelaide however, proving a stable alternative for investors looking to purchase a rental property. Adelaide offers a variety of well-priced apartments and significant infrastructure projects creating greater access to all corners of the capital.

A Boom in Auctions

Adelaide's property market is now considered one of the most profitable capitals in the country, highlights Realestate.com.au. Almost 95% of Adelaide's sales during the June quarter sold for more than their previous price, with auctions proving one of the key drivers in accelerating price growth. The number of registered bidders has increased nationally from 2.6 per auction in July 2020, to 6.9 per auction during the same time this year. People are more willing than ever before to spend on quality, spacious homes, prioritising those with outdoor space.

First Home Buyers Make Their Move

First home buyers are entering the South Australian market in force. In the 2020-21 financial year, a record number of people received the State Government’s $15,000 First Home Owner Grant, totally nearly $49 million. There has been a surge in demand across the state, with standout suburbs Mount Barker, Lightsview, Munno Para and Seaford. While first home buyers were drawn to the lifestyle benefits of regional areas, the CBD and northeastern neighbourhoods including Payneham, Marden, Cambelltown and Newton were also considered hotspots, thanks to their relative affordability, excellent amenity and easy commute to the city and beaches.

The Rental Squeeze

A boom in regional travel has meant investors and homeowners are choosing to list their properties as short-term holiday accommodation rather than long-term rentals. Home-sharing platforms such as Airbnb have seen a flood in new listings across South Australia, contributing to a long-term rental shortage in regional areas. Many towns are now considered “at capacity”, with unprecedented demand for accommodation.