Why Investors Are Jumping Back Into the South Australian Property Market
The South Australian property market is proving to be a shining star in the national real estate landscape. With record-breaking growth in both metropolitan and regional areas, it’s no wonder investors are taking a renewed interest. Here’s a deep dive into why South Australia’s property market is outperforming expectations and drawing investors back into the fold.
Adelaide’s Record-Breaking Growth
Adelaide’s property market continues to defy national trends, posting remarkable growth figures in November 2023. According to the latest PropTrack Home Price Index, Adelaide’s median home price climbed 0.4% month-on-month to a record high of $795,000, representing a staggering 14.64% growth over the past year. This translates to an impressive annual increase of $92,000 in median property values.
In contrast, Melbourne, once a dominant player in the property market, has experienced a decline. Its median home price dropped 0.07% over the quarter and 1.63% year-on-year to settle at $792,000, falling below Adelaide’s median for the first time.
Regional South Australia Outperforms National Averages
South Australia’s regional property market has also garnered attention for its exceptional performance. Regional SA’s median home price grew by 1.06% in the past month and an extraordinary 13.3% over the past year, reaching $454,000. This growth is the highest of any rural market in the country for the quarter, second only to regional Western Australia for annual growth at 15.08%.
To put this into perspective, the national average annual value growth for regional areas was just 5.48%, underscoring South Australia’s dominance in both metropolitan and rural markets.
Factors Driving the Boom
1. Affordability and Buyer Demand
Adelaide’s affordability, compared to other capital cities, has been a major factor in its sustained growth. Despite recent price increases, the city remains more affordable than Sydney, Melbourne, and Brisbane, making it an attractive option for both first-home buyers and investors.
Senior economist Eleanor Creagh of PropTrack attributes the growth to constrained stock levels despite an uptick in spring listings. “New listings are quickly absorbed amid strong buyer demand,” Creagh notes, highlighting the competitive nature of Adelaide’s market.
2. Pandemic-Driven Value Surge
Since the onset of the COVID-19 pandemic in March 2020, Adelaide’s combined dwelling prices have risen by an astounding 80%, the highest growth of any market in the nation. Units, too, have seen significant appreciation, climbing by 63.7% over the same period. Nationally, Australia’s capital cities saw combined dwelling prices rise by 33.7%, making Adelaide’s figures even more noteworthy.
Regional Hotspots Showcasing Unparalleled Growth
Specific regions within South Australia have become investor hotspots due to their robust growth rates.
- Barossa-Yorke-Mid North: Home values rose by an impressive 17.65%, with the median value now at $461,000.
- South East South Australia: Properties here have climbed 11.58%, reaching a median value of $506,000.
These numbers reflect a broader trend of regional markets becoming increasingly desirable, thanks to lifestyle shifts and demand for more spacious living environments.
Stability in the Rental Market
The rental market in South Australia remains highly competitive, particularly for properties priced under $500 per week. With low vacancy rates, landlords are benefiting from a steady stream of quality tenants and competitive rental returns.
James Packham, Managing Director of Harcourts Packham, explains: “Low vacancy rates mean well-priced rental properties are leasing quickly, particularly in desirable suburbs.” For property investors, this is a golden opportunity to secure solid rental income while capitalising on the broader market’s appreciation.
Adelaide’s Standout Suburbs
Adelaide’s western suburbs have led the charge in metropolitan growth, with median home values rising by 17.55% over the past year to $859,000. Other notable areas include:
- Northern Adelaide: Median values up 17.35% to $687,000.
- Southern Adelaide: Median values up 13.76% to $818,000.
This diversity of growth across different regions highlights the broad appeal of Adelaide’s property market, whether for residential buyers or seasoned investors.
A Seller’s Market
Limited stock levels and sustained demand have created a market that heavily favors sellers. Properties are often receiving multiple offers and selling quickly, with many buyers eager to secure homes before potential interest rate changes.
At its latest meeting, the Reserve Bank of Australia (RBA) held the cash rate steady at 4.35%, maintaining a level of stability in buyer sentiment. However, many are closely watching the RBA’s upcoming decisions, hoping for a rate decrease in 2024 that could further bolster buyer confidence.
A Look at the Numbers: PropTrack’s December 2023 Report
Metro and Regional Growth Comparison
| Region | Monthly Growth | Annual Growth | Median Value |
| Adelaide | 0.40% | 14.64% | $795,000 |
| Rest of SA | 1.06% | 13.30% | $454,000 |
| National | 0.15% | 5.53% | $800,000 |
Houses
| Region | Monthly Growth | Annual Growth | Median Value |
| Adelaide | 0.42% | 14.79% | $846,000 |
| Rest of SA | 1.10% | 13.70% | $462,000 |
| National | 0.19% | 5.64% | $872,000 |
Units
| Region | Monthly Growth | Annual Growth | Median Value |
| Adelaide | 0.21% | 13.36% | $616,000 |
| National | -0.05% | 4.99% | $662,000 |
Challenges for Buyers
While rising prices are a boon for property owners and investors, they pose challenges for first-time buyers and those looking to enter the market. As affordability deteriorates, many potential buyers are forced to reassess their budgets or explore less competitive regional areas.
Investor Opportunities
For investors, the current climate offers lucrative opportunities:
- Capital Growth: With Adelaide and regional SA delivering double-digit annual growth, investors can expect solid returns on their investments.
- Rental Yields: The competitive rental market ensures steady cash flow, particularly for properties in desirable locations.
- Long-Term Stability: South Australia’s consistent performance, even during national market downturns, underscores its resilience and long-term investment potential.
Looking Ahead
As South Australia continues to outperform other markets, the state is poised to remain a stronghold for property investment. Whether you’re a seasoned investor or exploring opportunities for the first time, South Australia offers a unique combination of affordability, growth potential, and stability.
With a competitive rental market, record-breaking property values, and strong buyer demand, now may be the perfect time to consider investing in South Australia’s booming real estate market.
Discover More Opportunities:
Broadland Estates can help you navigate South Australia’s thriving property market. Whether you’re looking to buy, sell, or invest, contact us today for expert guidance and personalised advice tailored to your real estate goals.
