Snapshot - South Australia's real estate market
In the realm of real estate, the strong sales prices that continue to be experienced across the South Australian market makes it challenging, particularly for those looking to break into the property market. In fact, average home prices in SA have risen more than $85,000 over the past year and more than 50% since pre-COVID times.
Adding to the dynamics at play, recent PropTrack data showed that Adelaide overtook Perth in March 2024 to become the nation’s most challenging market in which to secure a rental. That makes it more important than ever for buyers, sellers and investors to understand the current trends and factors influencing property prices across different parts of the State.
Current real estate market trends
While a report by Oxford Economics released in early 2024 forecast that house prices in Adelaide will flatline for most of the next 12 months, they are expected to rebound in 2025. Over 2025, the report predicts local house prices will then increase 5.8% to $861,500. By the middle of 2026, that number is predicted to be as high as $881,500.
Steady growth: Adelaide's property market has outperformed all others over the past few years and South Australia's regional markets have been leading the nation for price growth. These results continue to be attractive to investors and homeowners because it offers a sense of long-term security. However, SA had not experienced the market rises in other states and has come off a low base.
Regional resurgence: Regional areas in South Australia have experienced a resurgence in interest, driven by factors such as remote working opportunities, lifestyle preferences and affordability compared to many metropolitan areas.
Urban renewal: Metropolitan areas like Adelaide have seen significant urban renewal projects, revitalising neighbourhoods and attracting investors wanting modern living spaces and amenities. You’ve only got to take a drive through the new Fort Largs development, Bowden or Morphettville to see urban regeneration in action.
Sustainable living: There's a growing emphasis on sustainability and eco-friendly features in property development, reflecting a shift in consumer preferences towards greener living options.
Demand for rental properties: With a steady influx of students and migrants, there remains a strong demand for rental properties across Adelaide, particularly in those suburbs close to universities, the CBD and major employment hubs. That’s always good news for those investors who are prepared to pay a premium in the current market but have a long-term investment strategy in mind.
But what are the factors that influence property prices in different parts of SA?
The South Australian real estate market is influenced by a myriad of factors, ranging from economic conditions to lifestyle preferences. Understanding these factors is essential for making informed decisions:
Location: The age-old adage "location, location, location" holds true in South Australia as well. Proximity to amenities, schools, public transport, and employment opportunities significantly impacts property prices. Coastal areas and neighbourhoods with scenic views typically command premium prices.
Economic indicators: Economic indicators such as employment rates, GDP growth, and infrastructure development plays a crucial role in determining property prices. Areas experiencing economic growth and investment tend to see a corresponding increase in property values.
Supply and demand dynamics: Supply-demand dynamics dictate market conditions. Areas with limited supply and high demand typically experience faster appreciation in property prices. Conversely, oversupply can lead to stagnant or declining prices.
Infrastructure projects: Infrastructure projects such as new or upgraded roadways, public transportation networks and commercial developments can uplift surrounding property values. Investors often keep an eye on planned infrastructure projects because they can be a good indicator of future growth potential.
Demographic trends: Demographic factors such as population growth, age distribution and household composition typically influence housing preferences and demand. Areas with growing populations, particularly young families or affluent retirees, often experience increased demand for housing.
Market sentiment: Market sentiment, influenced by factors like consumer confidence, interest rates and global economic conditions, affect buyer behaviour and, consequently, property prices. Positive sentiment leads to increased activity and higher prices.
So whether you're a buyer, seller, or investor, staying informed and seeking professional guidance can help you make sound decisions in this dynamic landscape. The common position of experts is that the South Australian real estate market will continue to remain an attractive option for buyers for some time to come.
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