South Australia Market Update

Quarter 4, 2020

Market Overview

Well, Adelaide should be feeling pretty pleased with itself when it comes to the real estate market. Even though 2020 has been one of the most challenging years in Australia for a long time, Adelaide’s housing market has outperformed much of the country.

South Australia, in particular Adelaide, has always been known as the slow and steady solid performer but for the last 12 months it is has outperformed many of Australia’s capital cities including Sydney, Melbourne, Brisbane, and Perth for the percentage change in dwelling values.

Source: Corelogic December 2020

Why buy in Adelaide?

Adelaide is known for having a more achievable buy-in price, as well as strong capital growth potential (with smart purchases), strong rental yields and low rental vacancies. The rental vacancy rate in Adelaide is currently sitting at 0.8%, considerably lower than many other capital cities, especially those in the Eastern States. All these factors lead to less impact on people’s cash flow which is important in an uncertain jobs market (due to the pandemic).

And that’s just for the investors. For the home buyers, we have lifestyle after lifestyle suburb. If you want the city, the beach, the hills it is available. Actually, if you bought smartly you could probably access all 3 easily! Lower price points mean mortgages aren’t so high and buyers don’t have to stretch themselves so far to buy a nice home. It’s no wonder Adelaide appeals to the locals as well as interstate and international investors.

South Australia has also benefited in 2020 from having low numbers of Coronavirus cases (with just the occasional flare-up – including a 3-day shutdown) and that meant life and the economy were able to return to a more normal way of life quickly. We still had to make some changes. Many of the properties we inspected in Quarter 4 for clients had long queues out the front as eager buyers waited for their turn to look inside.

Demand versus Supply

Buyer sentiment is high, and demand is strong. Most properties are selling at auction above the advertised price. Low numbers of stock in high demand areas (eg family size homes in metro areas) are seeing some emotional buyers throwing caution to the wind and paying too much for property as they experience FOMO (Fear of Missing Out).

My advice. Be patient.

The market is tight, with historically low levels of stock, but it is well worth persisting with.

Do not overextend yourself. Be aware of where prices sit in the current market, be clear on what you want and what you can be flexible on (eg. block size, style of home, location). There is the right home out there for everyone, and it will happen, it just takes patience and research.

Looking forward

We expect pent up demand from buyers that couldn’t secure property before Christmas will hit the market as soon as it opens in 2021.

We hope our borders will remain open and that tourism will continue to pick up, injecting cash into our economy. Federal Government support packages are still in place to March for those that need it.

The Reserve Bank of Australia’s official cash rate is at an all-time low of 0.10%, and many experts predict the cash rate will not rise for some time, possibly a number of years. Buyers who are able to secure loans do so with some of the lowest borrowing costs in history.

I expect the market will stay tight, and demand will continue to outstrip supply. If Australia continues to manage the Coronavirus pandemic tightly and a vaccine is released in 2021 there will some opportunities are amazing and there for the persistent buyer.


Suburb to watch



Pennington is a small northern suburb of Adelaide, located about 10 km from the city centre. The suburb is residential, apart from a light industrial pocket to the south. It is definitely an upcoming area and has flown under the radar for too long.

The locals say it is a safe area and a great place to raise kids with plenty of parklands, sports facilities and easily accessible shops. The suburb has two local primary schools, the Pennington R-7 campus and Our Lady of Mount Carmel Primary School. In neighbouring suburbs, you will find some good secondary schools including ????.

The suburb is well serviced by nearby main roads that can get you into the city or the beach in ???? minutes or an even shorter journey will get you to the popular West Lakes river system??.

Depending on where you live in Pennington there are a few train stations in walking distance in neighbouring suburbs. It will take you about 10-12 minutes to get into the CBD depending on which station you embark at. It is also a great train line for anyone that works in Port Adelaide or Outer Harbor, where the Port Adelaide Passenger Terminal is. There are also local bus services available.

The majority of Pennington’s dwelling types, 83.5%, are separate houses and a further 10.7% is townhouses or semi-terraces so there is a very small number of units or apartments in Pennington. Pennington has an affordable house median of $437,500 and in the last 12 months has experienced substantial growth at 12.47%. Rental yields over 5% are easily achieved with savvy buying and large blocks provide opportunities to land bank and wait for your property to grow in value.

Pennington is definitely worth a second glance

Purchase Example

5 Beds | 3 Baths | 16cars | Sold $690,000 | Agent Listing

Rarely does a character Bungalow master the art of indoor/outdoor entertaining, juggle a floorplan of up to 5 bedrooms, flexibility to work from home or the ideal teenager’s retreat/rumpus plus an abundance of vehicle accommodation and a sparkling swimming pool all on a private and fully fenced 700sqm (approx.) allotment.

Rental Wrap Up 

Vacancy Rates and Median Prices

Adelaide Q4 Vacancy Rate 0.8%


The last quarter has continued to see increased demand for rental properties. Many properties already under management, have been leased for increased values and new listings have been seen achieving higher than first assessed rental amounts. Good properties received multiple quality applications, with tenants finding the market extremely competitive and at times offering more than the advertised rent. When this occurs it has been important to still consider what is best for the landlord and the long term of the property, not just focussing on the increased offers. However, when splitting quality applications, there have been times that the increased income has been looked upon favourably. Overall the average rental value on homes for Adelaide has increased 4.9% on the previous year.

Most in demand are stand-alone homes, best suited to couples or families. Some yard space and space for outdoor entertaining, as well as a fresh interior with heating and cooling and good storage, are what the majority of tenants desire. Most of the properties we manage have been purchased for investment purposes, so when we are working with Buyers Agent clients we consider what tenants are actually after. Prospective tenants also love that our rentals are long term as a lot of them are looking to rent for the foreseeable future without the thought that the owner may need to move back in or sell.

The vacancy rate has sat at 0.8% for Adelaide, considerably less than Sydney and Melbourne at 3.5% and 4.4% respectively. Combining this with the capital growth that Adelaide has seen, it continues to hold strong as a suitable position for property investment.

We are expecting and have seen the demand continue into the next quarter with a busy start to the year and properties gaining large interest, higher rental values and quality applications.




Case Study 

Interstate Investment Buyers seeking Land Banking
by Katherine Skinner

by Katherine Skinner


Katherine Skinner began her career in property over a decade ago in Melbourne working in Buyer’s Advocacy and Property Management. Returning to her home town 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 2 years running, a REIA National Awards 2019 Finalist and is the current South Australia representative for REBAA.

0438 729 631 or email Katherine