Adelaide’s Housing Market

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Experts are split over the performance and outlook for Adelaide’s housing market as new figures show prices rocketed in the past year.

After showing signs of easing last year, the market has taken off this spring with double-digit annual price growth being recorded in many suburbs.

However some experts are concerned about the longevity of the boom and its impact on housing affordability.

What’s been happening?
The latest RP Data-Rismark Index (31 October, 2007) tipped Adelaide as the country’s best performing housing market, with overall property prices up 24.3 per cent in the year to September.

“This is likely to be a function of the fact that Adelaide is the most affordable [mainland] capital city, with a median property value of just $355,908, combined with the impact of the resources boom and recent defence expenditure,’’ RP Data said in a report.

At the same time, Australian Property Monitors (October 25, 2007) also reported price growth, albeit at a more modest pace, for the September quarter.

According to APM’s figures, Adelaide’s median house price rose 10.6 per cent over the year to September, while apartment prices were up 14.4 per cent.

Real Estate Institute of South Australia (REISA) president Mark Sanderson is bullish about the current property market.

“It’s an unbelievable forward-moving market like I haven’t seen in 22 years. Property is selling well and selling quickly,’’ he told The AFR Smart Investor magazine (November, 2007).

Toop & Toop managing director Anthony Toop told The Australian Financial Review (October 27-28, 2007) that volumes were well down on last year.

During the weekend of 20-21 October agents reported about 1200 homes open for inspection. On the same weekend in 2006, 1830 homes were open for inspection.

Where’s good?
In a recent edition of AFR Smart Investor, analysts Australian Property Monitors picked the 10 best prospects around South Australia, including:

Suburb
Region
Property type
2006-07 change
Predicted change

Everard Park
Adelaide metro west
Unit
62 per cent
24 per cent

Wallaroo Mines
Country west
House
49 per cent
22 per cent

West Hindmarsh
Adelaide metro west
Unit
50 per cent
21 per cent

Highgate
Adelaide metro east
Unit
52 per cent
20 per cent

Rose Park
Adelaide metro east
House
53 per cent
19 per cent

Clearview
Adelaide metro west
Unit
33 per cent
18 per cent

Pasadena
Adelaide metro east
House
49 per cent
17 per cent

Port Germein
Country west
House
33 per cent
17 per cent

Maitland
Country west
House
38 per cent
16 per cent

Gilberton
Adelaide metro west
House
43 per cent
16 per cent


What happens next?
Amid the big numbers, Macquarie Bank head of property research Rod Cornish predicts a more staid outlook for Adelaide home owners and investors.

Commenting in the AFR Smart Investor Magazine, he said: “The years 2003-2004 was the strongest period of growth they had seen in Adelaide in nearly 20 years. Then it did slow down for a bit. But we’ve certainly seen strength come back into that market, it’s probably a different phase of the cycle.’’

Date: 7th November 2007
(from e-Choice)