By Herron Todd White
In February, we discussed the prospects of the South Australian metropolitan housing market for 2019. In the shadows of the banking royal commission and the downward spiralling east coast markets, the claim was made that the Adelaide housing market would buck the trend with sustained growth. Positive market sentiment is being driven within the media with a constant flow of articles spruiking the Adelaide market. Watching from the bleachers, things appear positive… but those with front row seats are seeing things a little differently.
The inner and middle-rings are growing weary of carrying the median house price to its lofty heights. These market segments were the best performing over the first six months of 2019 as the outer ring remained stable. Focusing on some of Adelaide metropolitan’s smaller suburbs, Nailsworth, Evandale, Black Forest and Allenby Gardens have all been high achievers over 2019’s first half. Each of these suburbs comprise an area of less than one square kilometre and are characterised by turn of the century dwellings on modest allotments and considered the next best thing in regard to location.
Nailsworth is an inner northern suburb located approximately 5.2 kilometres from the CBD. Nailsworth has had a number of transactions in the first half of the year with a median of $655,000. At the top end of the pile is the suburb’s record sale of 51 Balfour Street which achieved a sale price $1.21 million in January. This sale eclipsed the previous record of $1.07 million set in 2017. This property comprises a fully renovated and extended bungalow disposed as four bedrooms and two bathrooms on a 698 square metre allotment.
In the second half of 2018, the small northeastern suburb of Evandale located some 5.5 kilometres from the CBD had eight dwelling sales settle with a median of $690,000. In the six months post, Evandale has had five transactions at a median of $880,000 showing an increase of approximately 27%.
Recent sales include 44 Elizabeth Street ($844,000), a four-bedroom, two-bathroom blue stone villa on a 534 square metre allotment and 10 Leslie Street ($885,000), a four-bedroom, twobathroom circa 1990s reproduction dwelling on a 552 square metre allotment.
Black Forest is situated 4.7 kilometres south west of the CBD and is serviced by both the Brighton train line and Glenelg tram line. Fifteen transactions have been recorded within the past 12 months with prices ranging between $430,000 and $1 million.
The first half of 2019 has seen a 7% increase in dwelling values with Black Forest having a current median dwelling price of $745,000. Purchased at the median in April was 4 Forest Avenue for $755,000. This is a circa 1930s, four-bedroom, two-bathroom Tudor style dwelling on an allotment of approximately 603 square metres.
Allenby Gardens is located 6.1 kilometres northwest of the CBD and six kilometres east of Grange Beach. The suburb comprises a mixture of early and mid 1900s dwellings with a significant amount of 1990s and 2000s infill development. The first half of 2019 saw a 24% increase in the median dwelling price from the back end of 2018 to currently sit at $685,000. Of the 2019 sales, 27B Barham Street for $470,000 represents the entry price point for the suburb. This property comprises a circa 2018 community titled brick veneer dwelling disposed as three bedrooms and two bathrooms on an allotment of 266 square metres.
The outer ring remained relatively flat over the first six months of 2019. Good reference points for this market segment are Golden Grove north-east, Morphett Vale south and Paralowie north of the city. Each of these suburbs is geographically large and has a high turnover of stock with the two latter each constantly achieving 200-plus transactions annually. Sales data shows both Paralowie and Morphett Vale have remained stable with median prices hovering between $300,000 and $315,000 since late 2016. Golden Grove saw a reduction in the median dwelling price from $475,000 in the second half of 2018 to $435,000 in the first half of 2019. The outer ring is considered more susceptible to slowing market conditions. These suburbs will be important reference points over the next 12 months to provide an indication of how the broader outer ring is tracking.
Taking a broader look at the market, the March quarter is one of the most active and provides an important insight into how the market tracked over the busy summer months. The median house price grew in the March quarter by 0.625% to be at a record high of $480,000. This sparked significant media and deservedly so on face value. When you dig a little deeper, the 2018 and 2017 March quarters each had growth of 1.1% and 1.7% respectively. So, we had growth in the March quarter but at the slowest rate since 2016 which saw a reduction in the median house price. On the auction front, for the four weeks post Easter, clearance rates faded to below 50%. For the same four-week period in 2018, clearance rates varied between 59% and 70%. These numbers are backed up by agents in the field who are reporting a slowing in buyer activity with an increased amount of stock on the market. The numbers are suggesting that the market is slowing.
Things have been looking rosy for 12 to 24 months. The expectation is that property prices will remain stable over the second half of 2019.
The hope is that those who stop to smell the roses don’t start detecting a stench.
Speak with an Adelaide Mortgage Broker today.