SA Property Market Insights – Q2, 2020
Quarter 2, 2020
Market Overview
Adelaide’s stable property market appears to be weathering the storm and holding up well under unprecedented times.
Adelaide is one of three cities (including Canberra and Hobart) across the country where property values held out the longest and continued to climb despite the nationwide coronavirus-led market slowdown new CoreLogic figures revealed. June was the first month where Adelaide recorded a small decline of 0.2% but its quarterly result was still positive at 0.7%.
While the rate of growth lost momentum, Real Estate Institute of South Australia president Brett Roenfeldt said it was still a win for the local market. “Adelaide is an extremely stable and resilient market that just keeps getting on with it,” he said.
However, it wasn’t just the stable market, attractive prices and lifestyle options that were holding the Adelaide market fast. It was also a direct result of a lack of stock.
Restrictions in Place
In April after 3 stages of Coronavirus restrictions were implemented, including a ban on public inspections and public auctions, publicly advertised stock levels were almost non-existent. Selling agents were openly admitting that vendors did not want to go to public market and launch campaigns amidst this crisis. Mr Roenfeldt, the REISA president, said sales had dropped by about 50 per cent since COVID-19 was declared a pandemic.
Vendors in an attempt to avoid the high cost of listing and advertising their properties have asked selling agents to use their networks to try to sell their properties “off-market”. This meant that there was a much higher than usual amount of “off-market” opportunities for prospective purchasers. If you knew how to find them! We saw 38 of these, completely “off-market” properties come across our desk in one 48 hour period. We still had to weed the good from the bad but this level is something we had never seen before.
There was definitely a drop in investor sentiment across the market, with unemployment rising rapidly and concerns over just how long the economic downturn will draw out due to COVID-19.
Stimulus packages announced by the Federal and State Government eased some of the building pressure off Australians. Jobseeker, Jobkeeper, mortgage repayment holidays, one-off payments, to name a few all played a part in slowing the decline of consumer confidence.
While we have seen many investors take a back seat over the month of April, there are still some with finances ready wanting to take a leap of faith and make the most of less investor competition. Low stock levels, plus many off-market opportunities, can result in you being 1 of 2 prospective purchasers taking a look at a specific home compared to 30 groups through an open home.
Restrictions Easing
During May public auctions and inspections were reinstated by the government with limited numbers allowed.
Privates sales campaigns have always outstripped auction campaigns in Adelaide as the preferred method of sale. Therefore, the banning of auctions did not affect us as much as our auction loving sister cities Melbourne and Sydney. However, it was still a juggle for some selling agents and vendors when it was first announced.
As COVID-19 restrictions eased buyers flocked to open houses, resulting in excessive queues out the front of homes that would have never seen such interest, purely because stock levels are extremely low.
We are seeing strong competition within first home buyer preferred areas, which also tick the boxes for high performing investments. Much of the demand has been driven by interstate buyers, particularly from Melbourne and Sydney. While buyers in those markets have experienced boom and bust cycles, Adelaide has been a more stable market.
Around half of our clients are investors from interstate or overseas, priced out of local markets or seeking lifestyle and investment opportunities. Adelaide according to SQM Research has one of the lowest rental vacancy rates in Australia which really adds to the appeal for investors who are looking for steady rental returns.
Real Estate Institute of South Australia president Brett Roenfeldt “There are exceptionally good opportunities where buyers can get real value for money, taking advantage obviously of very low vacancy rates for solid rent returns but also looking at the incredible lifestyle benefits of living in this great state,” Mr Roenfeldt said.
Going forward.
Listings are still very tight but we are seeing slow improvement in the number of properties coming onto the market and the number of auctions being booked — since the major easing of restrictions, buyer numbers and open inspections have greatly increased.”
There is understandable nervousness about the government eventually winding back stimulus packages and borrower repayment holidays expiring however as South Australia has been able to fast track its loosening of COVID-19 restrictions we hope that many sectors of our economy will pick up and return to more normal conditions.
We believe Adelaide’s steady market will hold us in good stead and any drop in property values will be short-term in the longer cycle of property. Adelaide is fast becoming a destination city and its affordability, lifestyle and pace of life are attracting many buyers.
Suburbs to watch
The suburb reviews were written in early March before strict self-isolating rules came into play. We have decided not to rewrite them, as we believe the reviews provide a longer-term view of the suburb. Local shops and business may close during the pandemic, but we believe that given time they will return. The pandemic does not alter their locations, access to transport, their parks, schools and essential amenities.
Henley Beach - "To be beside the seaside"
Overview
Up-and-coming Henley Beach has a mellow, seaside feel and a vibrant food scene, with upscale seafood restaurants and cool Modern Australian eateries sharing space with fish and chip shops, long-established pubs and ice cream parlours. A long stretch of fine sand draws swimmers, paddleboarders and walkers, and the jetty is a popular fishing spot. Quirky shops sell beachwear, indie fashion and stylish homeware.
There’s plenty to see and do right in Henley. You can swim, paddle, fish or sun yourself on this wide and sandy beach. Henley Square right on the beach is a destination for locals because of its beachside location and its fabulous variety of restaurants, cafes and bars. There are water fountains for kids to splash in, uniquely designed wave-shaped timber seats leading right up to the jetty, large grassed areas for a picnic, and a stunning futuristic beach shower that you will want a photo under!
Shop and Eat
You’ll find everything you need for holiday or everyday living in Henley Beach, whether it be at Henley Square, or at Henley South.
Enjoy live entertainment at a number of venues at Henley Square or sit in the sun with a coffee or drink and then take a walk along the shopping strip to indulge in some retail therapy and pampering. Fashion boutiques, gourmet food outlets, hair, beauty and pampering, eclectic gifts and homewares and all the practical necessities of life are all there for you.
You’ll find cosmopolitan restaurants, hotels, casual cafes, takeaways. There’s a wide variety of cuisines on offer, and of course, lots of fish and chips! And if you’re dining beachside during the evening, every meal is served with a magnificent sunset!
Exercise and Play
The long stretch of fine sand that runs the length of the suburb draws swimmers, paddleboarders and walkers, and the jetty is a popular fishing spot or you might prefer to relax and sun yourself.
There are a number of parks or greenspace including Henley Square located behind Henley Jetty on the Esplanade, John’s Reserve with a playground and open space, Henley Grange Memorial Oval and John Mitchell Oval home to cricket and football competition. The Seaside Tennis Club borders the Western Hospital and Collins Selars Reserve.
Or you might want to stroll along the coastal path all the way to Grange Beach or even walk the Linear Path – right into Adelaide.
Move and Transport
Henley Beach is only 20 minutes from Adelaide central. Henley Beach is near Grange Road and Henley Beach Road, both connect the suburb to Adelaide City Centre. Seaview Road runs along the coast.
Henley Beach is serviced by public transport run by the Adelaide Metro which provides bus services to the Adelaide city centre and Glenelg.
Learn
For families looking for local school options, there are several in the suburb, including Fulham Gardens Primary School, Fulham North Primary School, Henley High School, St Michael’s College, Star of the Sea School and Henley Beach Primary School (Henley South)
There is also Henley Community Kindergarten.
Housing
There are lots of options when it comes to good areas in Henley Beach. Modern, newer builds on sizable blocks are popular and sought after in this area. And as it commonly is for beachside suburbs the closer you get to the beach typically the higher the price you pay!
Purchase Example
5Beds | 2 Baths | 2 cars | Sold $1,710,000 | Agent Listing
From beach to the ultimate backyard in a flash. The only thing better than being an 8-minute walk from the beach is a north-facing backyard with heated pool and 8-person spa. A solar-powered, sandstone fronted 4-5-bedroom home that subtly channels the charming homes of yesteryear and super-charges the comfort levels for the modern family. Close to Henley High and Primary Schools, local Kindergarten and tennis club/courts.
Crafers West - "The Hills are Alive"
Overview
Crafers West is a South Eastern suburb of Adelaide in the beautiful Adelaide Hills.
In the Adelaide Hills, you can wind your way down leafy lanes, stopping at villages dappled in light and brimming with wildlife encounters and cultural discoveries. You’ll find restaurants serving South Australia’s best produce, while wineries beckon from leafy groves, eager for you to sample one of their cool-climate drops.
Crafers West is a beautiful part of the world and is focused on quiet, peaceful living and a great community. There is no shortage of fantastic views of mountains and loads of wildlife including birds, kangaroos, koalas and rabbits. Crafers West contains the headwaters of Brown Hill Creek and is dominated by steep terrain and native scrub.
You really are spoilt for choice in Crafers West, you can enjoy all that the Adelaide Hills has to offer or in less than 30 minutes you can be in the city for work or a completely different but equally amazing day.
Shop and Eat
There might not be a lot of options in the suburb itself but that doesn’t mean there isn’t a tonne of options at your doorstep. The towns of the Adelaide Hills have so much to offer. You could walk to the Crafers Hotel for a great pub lunch or head to Stirling with great restaurants, boutique shops and all the usual ‘big city’ conveniences.
The towns of Aldgate, Stirling, Oakbank, Birdwood, Crafers, Mount Barker and Hahndorf are all worth exploring. You can sit down for a long lunch or fine wining and dining, taste some of Australia’s best cool-climate wines, food and produce, straight from nature’s top shelf in the Adelaide Hills.
Local produce is key in the hills. You can pick-up handmade cheeses, cured meats, organic fruit, vegetables and chocolate at weekend farmers’ markets.
Play and Exercise
When you are in the middle of the Adelaide Hills your outdoor options are endless. However, Crafers West on its own is home to some beautiful parks.
Cleland Conservation Park and Mounty Lofty Park: Cleland Conservation Park is a protected area with a significant area of natural bushland on the Adelaide Hills face and includes the internationally popular Cleland Wildlife Park and the popular tourist destinations of Mount Lofty summit, with spectacular views of Adelaide, and Waterfall Gully. Visitors can feed and wander at their leisure among kangaroos, wallabies, Emus and waterfowl. Visitors also have the rare opportunity to be photographed holding a Koala, under supervision from Parks and Wildlife Officers. There is also an Aboriginal cultural tour.
Eagle Mountain Bike Park: KidsinAdelaide recommend Eagle Mountain Bike Park “if you’ve got BMX bandits, MAMILS, Lycra Lovers or just regular bike riding fans in your family, you really should put Eagle Mountain Bike Park on your list of things to do”. Eagle Mountain Bike Park has 22kms of designated bike trails to suit every type of bike rider, from kids and beginners to experienced cross country and downhill riders.
Move and Transport
Crafers West is home to the ‘closed’ Bridgewater railway line, which admittedly won’t get you far.
However, with easy access to the freeway (it runs through the north of the suburb), Adelaide is less than a 30-minute drive away. Making it impossible for some people to resist the chance to live in the beautiful hills whilst making a short commute to work. The M1 also connects you to the beach in the east and all of South Australia in the west.
There are plenty of public transport options which travel along the freeway into the city, including many school bus routes to the sought-after private schools in Adelaide.
Traffic in the suburb itself is minimal as it is not a mecca for tourist compared to some of its neighbours.
Learn
There are excellent primary and secondary schools close by but none in the suburb itself.
You have schooling options in neighbouring suburbs, Crafers (Crafers Primary School), Stirling ( St Catherine’s School), Sturt (Upper Sturt Primary School) and Healthfield (Heathfield High School).
Many in the area commute to Adelaide to one of the many schooling options in the city also.
Housing & Price
Blocks in Crafers West are rarely completely flat. They are often across numerous levels dependant on the part of Crafers West the property in is.
House prices can differ significantly from street to street, and the closer you are to the Freeway, the more affordable the prices will be.
Purchase Example(s)
4 Bed | 2 Bath | 3 Cars | Sold $975,000 (2019) | Agent Listing
Perched upon 10 glorious acres, prepare to be totally captivated by “Aratinga” and all that it has to offer. A modern two-story 4 bedroom family home, with far-reaching views to Glenelg, beautiful established gardens and an array of native flora and fauna. Ideally located just minutes from Crafers “Park & Ride”, 5 minutes from Stirling and the tollgate yet, it feels like you’re miles away.
Vacancy Rates and Median Prices
Adelaide Q2 Vacancy Rate 1.2%
The rental market here in Adelaide has held strong in the last quarter, with properties continuing to lease generally within a week from advertisement commencing. Prices have also stayed strong, we have been able to successfully increase rents on some homes in in-demand areas when re-leasing homes.
Family style homes with rental values ranging from $300 – $650 have received good levels of enquiry with quality applications. Landlords have also been very smart and strategic when considering and opting into marketing options that we have available. Combining strong pricing strategies with professional photography, floorplans and signboards when the home is located in a high-traffic area have created great results for our clients.
We have also found tenants responding well to properties that we have coordinated some improvements to. Whether it be painting, new flooring, freshening kitchens and wet areas, these properties have then seen an increase in rental yield and once again quality tenant interest.
The furnished property market has seen greater competition with some Air BnB and short-term holiday rentals hit the long term residential market due to less travellers in the State. We have had multiple furnished options for lease and have been able to still see results with some price adjustments to meet the market. Student accommodation has also seen a hit and landlords have had to adjust to these new conditions and change in demand.
We feel that the market will continue to hold strong, with good demand and the right strategies landlords in Adelaide are on a safe bet.
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 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 2018, a REIA National Awards 2019 Finalist and is the current South Australia representative for REBAA.
0438 729 631 or email Katherine
Very attentive knowledgeable and patient service. I used national property buyers to purchase 2 houses in Adelaide. I live in Sydney and travelling to view properties with two young children is not an option.
Adelaide has markets within markets so can be tricky for an outsider to navigate. The buyers agent fee for me was well worth the service as had I purchased by myself could have easily overspent.
This company did not push me or force me to buy anything. Their knowledge in rent and management is great so you get a spot on rental appraisal. I highly recommend them and I will use as my letting agents. They listening to what I want and helped me work through options.
I told them at beginning my exact financial goals ambition and they delivered. Very happy customer.