Q3 2022 Property Market Insights Report
Quarter 3, 2022
Market Overview
Adelaide continues to offer investors excellent buying opportunities.
Nearly 70% of the clients we have helped this quarter have been investors.
Now I maintain as a local Adelaide resident we have so much to offer our residents. Whatever lifestyle they are chasing, we will have it, whether it be city, beach, or trees. However, lifestyle alone isn’t attracting local and interstate buyers to our property market, I believe the three main attractions are:
- We have one of the most affordable median dwelling values out of Australia’s 8 capital cities ($652,959). Interstate investors who can no longer afford their local markets look towards our more affordable options.
- We have high rental yields and a very low vacancy rate. On average our clients are enjoying a rental yield of 4.88% with some who are deliberately chasing rent achieving closer to 6%. Nationally in August rental yields were around 3.39% according to CoreLogic.
- The Adelaide housing has been more resilient to falls than most regions with its first decline in August of 0.1%. Despite this recent weakness housing values remain well above pre-COVID levels. According to CoreLogic Adelaide’s dwelling values at the end of August were 44.6% above March’s 2020 median values.
A little heat has come out of the market which is a good thing for buyers. Up until the start of this year if A-grade investment properties or desirable family homes were listed, selling agents would be receiving offers in mere days of listing. However, due to a slight increase in spring stock and reduced consumer confidence due to rising interest rates, buyers now have more time to think as competition has thinned.
Accordingly auctions clearance rates have dropped. Last year they frequently sat in the 80th to 90th percentile whilst this year they have settled to around the 70th. The 70th percentile represents a more balanced market between buyers and sellers.
We are seeing a decline in Auction clearance rates and more properties reverting to the “normal” Adelaide method of sale being a best offer by campaign. With changes in lending capacity, more and more purchasers are lacking the confidence to bid at auction and requiring a subject to finance clause in place.
For anyone chasing A-grade stock, we do advise be ready to act and have your A-team in place, which might consist of mortgage brokers, conveyancers and building and pest inspectors. Even with reduced consumer sentiment, there are definitely city and regional markets in South Australia that continue to experience substantial growth, you just have to know where to invest your dollars.
Adelaide continues to experience one of the tightest rental markets of the Australian capital cities. According to SQM Research, the vacancy rate is sitting at 0.4% whilst nationally it is around 1.00%. Whilst this is good news for investment owners, as they can take the pick of the bunch when it comes to tenants and scarcity is forcing rental yields higher it is causing problems for those looking for rental accommodation.
We expect the Adelaide market to stay relatively stable for the remainder of the year. Even with rising interest rates, we do not expect an influx of distressed properties and some vendors are holding back on listing their properties so the market we not be flooded with properties.
A significant proportion of our investor’s clients have been from outer state. Priced out of or put off by the faster-declining value of properties in their home states they are attracted to our affordable pricing, higher rental yields and continued growth and we expect this behaviour to continue.
We do not see any sudden change in the low vacancy rate for rentals as it would require a large supply of properties and they just aren’t there now. We expect asking rents to continue increasing as renters battles it out for properties.
My belief is this market offers plenty of opportunity to the astute buyer who has funds available, so do your research and buy wisely.
Suburb to Watch
Millswood - Location, Location, Location
Overview
Location, location, location. This inner southern suburb is perfectly located and filled with prime real estate. Close to the city, the beach, public transport, popular shopping hubs, premium schools and parks it has a lot on offer. And its just over 2,000 residents, 85% of whom are owner-occupiers, know it!
They enjoy the privilege of a well-located suburb that rubs shoulders with some of Adelaide’s heavy hitters when it comes to real estate. Each of its neighbours has a median house price of over $1 million dollars, with Hyde Park and Unley Park topping the list with median house prices of 1.905m and $2.02m respectively
The suburb is dissected by two rail lines. At the northern edge of the suburb, the Adelaide-Goodwood railway line forks with the Seaford railway line going southwest and the Belair railway line going southeast. Millswood Railway Station on the Belair line is located in the suburb and there are numerous buses and tram options on Goodwood Road just north of the suburb. Millswood enjoys easy access to the A5 and the A3, which can get you to the city, the beach, or the hills.
In the triangle created by the rail lines fork is Sasmee Park. Home to croquet, lawn bowls and lawn tennis clubs. Goodwood Oval to the west of the fork has sporting ovals, a grandstand, cricket nets, eight tennis courts and a playground and barbeque facilities. There is also an off-lead dog park nearby at Orphanage Park.
There are several quality schools nearby. Including government schools Goodwood and Richmond Primary Schools and Unley High School. The suburb is rich in choices when it comes to schools including independent, private and religious schools such as St Thomas’ School, Annesley Junior School, Cabra Dominican College, Walford Anglican School for Girls, Westminster School and Scotch College. There is also Tabor College Australia an Australian Christian tertiary college offering a range of liberal arts courses at the former Orphanage site on some beautiful grounds.
Millswood has access to both the upmarket shopping strip of King William Road at Hyde Park and a good selection of shops and services along Goodwood Road. A short distance away are the shopping centres of Unley, Black Forest, Mitcham and Westbourne Park.
The homes in Millswood that are located on the Hyde Park side are grand old homes on large blocks – this is absolutely prime real estate. Across Goodwood Road, the homes become more modest and situated on smaller blocks. The streets are wide and leafy, and the location is great throughout the entire suburb, there really is no bad pockets.
Purchase Example
3 Bedrooms | 2 Bath | 1 Car | 836m2 | $1,650,000
Just a moment from cosmopolitan Goodwood and King William Roads, some of Adelaide’s best schools and colleges, Sasmee Park and Goodwood Oval, public transport and the city itself, this c.1920s character family home gets better with every step
Interstate relocators seek new home and lifestyle
by Katherine Skinner
Director
Katherine Skinner began her career in property over a decade ago in Melbourne working in Buyer’s Advocacy and Property Management. Returning to her hometown of Adelaide in 2009, Katherine quickly established a reputation as an exceptionally thorough and diligent practitioner, providing outstanding customer service coupled with a calm and positive attitude while working with some of Adelaide’s most highly regarded agencies. Katherine was named the REISA Buyers Agent of the Year 3 years running, a REIA National Awards Finalist twice, a Women in Real Estate Finalist and is the current South Australia representative for REBAA.
0438 729 631 or email Katherine