Adelaide has emerged as the quiet achiever of the Australian property market, recording impressive annual house price growth over the past five years of 13 per cent with momentum tipped to continue due to a shortage of houses for sale.
Eliza Owen from CoreLogic says sellers in the Adelaide market are in a powerful position heading in the spring selling season.
"Stock on the market is at very depleted levels," she says.
"There has been more than one sale for each new listing added to the market in the past few months (and) the urgency is particularly evident in days on market."
Quicker sales
Homes are selling much quicker than this time last year - 28 days on market now compared with 33 last year - data confirmed by the nation-high auction clearance rate of 80 per cent recorded in Adelaide for the week ending August 25.
"South Australia's real estate market continues to do astonishingly well despite the low supply of housing stock and the prevailing high interest rates," notes the Real Estate Institute of SA (REISA).
It says metro Adelaide house prices reached a new median high of $785,000 for the June quarter, an increase of 12 per cent in the past year.
Unit prices grew faster at 18 per cent to $572,000 over the same period.
Since 2019 Adelaide's house prices have risen 64 per cent. Impressive - but market observers note these rises follow a fallow period for investors when between 2011 and 2019 house prices rose just 17 per cent.
Turn around time
What gives?
Lachlan Turner, MD, Turner Real Estate, says COVID was a catalyst for the subsequent growth in Adelaide's property prices, which he expects to continue.
"I think a lot of people thought about their lives and what they value," says Turner, who owns one of Adelaide's biggest agencies.
"We've seen a lot of South Australian expatriates return to Adelaide - there's been a big pick up in that and, certainly, investors are very strong."
He believes, as prices rise, fear of missing out is playing a role with buyers anticipating interest to ease next year.
"The key with every market is supply and demand and there just isn't many people selling. If you look at the five-year average, we're down astronomical numbers," says Turner.
"It's the supply, that's the problem, and then when there is an opportunity people have got that mindset of 'well it doesn't look like it's going to go backwards' so we'll just throw everything at it to get it.
What lies ahead
"People can't see the market going down at all and I think it will continue to go up."
Turner says the Government of South Australia is working to release more supply, but it will take will take two or three years to impact the market.
The best investment opportunities according to Turner, are the southern coastal suburbs of Adlinga and Sellicks Beach about 45 kilometres south of the Adelaide CBD.
Over the past year, REISA figures show that inner metro Adelaide houses made the biggest gains with 20 per cent price growth.
Of Local Government Areas, Walkerville had the biggest price increase of 42 per cent to hit a city-high median of $1.7 million, while West Torrens grew slowest at 9 per cent with the median nudging $1 million.
