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Operation revitalisation is underway in South Australia, according to one state real estate expert.
South Australia is on the rise. Adelaide, voted the third-most liveable city in the world, is experiencing a transition away from an agricultural and manufacturing state to become an innovation hub. Positive net migration for the first time in 30 years further affirms the rise of South Australia and its capital.
How has this shift impacted the market? And what implications will it have on future market activity? Real Estate Institute of South Australia chief executive Barry Money spoke with the REB’s Secrets of the Top 100 Agents to explain.
With these accolades comes what Mr Money describes as a revitalisation of the state. Contributing to this has been Adelaide’s ability to now attract employees looking for more space, freedom, liveability post-pandemic, and the potential to still work for large global corporations, like Amazon.
An increase in interstate buyers has boosted the South Australian property market over the previous 12 months. Prior to 2021, just 5.25 per cent of buyers of South Australian property had a primary residential address outside the state. The past 12 months have seen that number balloon to 12.8 per cent.
Mr Money states that this increased uptake of interstate, and international, buyers and investors entering the South Australian market brings with it a substantial jump in capital growth.
“Ninety per cent of all the suburb median house prices have increased,” he said. “And 90 per cent of that 90 per cent have actually increased by double-digit percentage figures.”
While Mr Money sees stability ahead for the state’s market, he notes investors should keep their eyes open to external economic factors, like Ukraine’s current crisis and its potential ramifications for Australia.
“I think what the[war in Ukraine] is going to do, from a global economy point of view, is [increase] energy prices. Australia’s a big country that’s run on diesel, and the cost of that has to be amortised somewhere into goods and services. That’s going to have an impact on household bills,” Mr Money said.
Mr Money warned that as the cost-of-living increases, there would be a dampening of confidence in the national property market. However, he believes this shouldn’t result in fading interest in the high potential of the South Australian property market.
High capital gains of up to 17 per cent for houses in metro Adelaide – something the region previously lacked – will be a key factor in attracting buyers and investors. Additionally, low median house prices of $515,000 state-wide, and $600,000 in metro Adelaide specifically and vacancy rates of close to 0 per cent make South Adelaide an enticing investment market.
Affordable housing is not the only entry point for South Australian investors. Units also offer themselves as a brilliant way to enter the market, according to Mr Money.
Although units have recorded slightly lower yearly price growth at 8 per cent, 130 new developments happening across the CBD present remarkable opportunities for investors or young individuals looking to move into the property market.
Finally, Mr Money concluded by confidently divulging that all these factors, along with significant investment into South Australian tourism, will facilitate and sustain the mini property boom across the state for at least the next 12 to 18 months.
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