Adelaide

The Smartline Report – December Edition

The month in review: Adelaide

By Herron Todd White
December 2015

At the start of the year we predicted that the residential property market would continue to gradually improve at a similar rate to that of 2014. We were correct in predicting a slow start to the year in terms of capital growth and that the latter half of the year would see improvements. Also we suggested that the inner suburbs would experience the greatest growth. This is evident in the graphs provided which show the increasing trend for median house prices in three inner suburbs which we believe are strong performers.

There have been some strong performers during 2015, particularly in the much sought after inner and beach side suburbs. The inner northern and southern suburbs have also seen strong sales activity and higher than expected sale prices. A prime example is the demand for quality character dwellings. We have seen character dwellings in areas such as Parkside and Prospect achieve sale prices in excess of $1 million after initially being advertised for much less. Overall we have seen increases in sale prices of around 6.5% in suburbs like Parkside and Norwood, with Glenelg achieving extraordinary results with an increase in the median house price of 21.85%. We note that although the growth is shown as above 20% it is based on a small number of sales which is likely to have magnified the growth.

Dwellings remain the most sought after property type.

Caution should be taken when purchasing apartments or units. This can be due to the fact that the market is over populated, particularly in the CBD and the price sellers are asking appears to be excessive. Most units and apartments are rented to international and local students, but the saleability of these properties is proving to be more difficult. There is an abundance of new high rise complexes throughout the CBD and the overall capital value of slightly older apartments has declined significantly. An example of this is the apartments in a development in Morphett Street where 1-bedroom and 1-bathroom apartments initially sold for almost $400,000 in some cases, but have seen prices drop to between $200,000 and $250,000 in the past six months.

The high unemployment rate continues to have an effect on the residential property market in Adelaide. Further uncertainty over the manufacturing industry including the closure of the General Motors Holden plant at Elizabeth and speculation over the future of the submarines continues to be a major factor, with further job losses potentially around the corner.

Mount Gambier
The market in Mount Gambier has remained relatively stable over 2015. There have been no major events or loss of jobs which are generally the cause of a significant change in the market.

Mount Gambier hasn’t seen too many strong performers this year, however two areas that have performed well are Springview Estate and Buffalo Crescent.

Springview Estate consists of 29 vacant allotments and in October alone, 13 of these allotments sold. Buffalo Court consists of 21 allotments and 17 of these allotments have sold since the beginning of the year.

At the beginning of the year we predicted that the most popular price range for house sales in 2015 would be $200,000 to $250,000. Now looking back on the year, this has proved to be the most popular price range.

We also predicted that house sale numbers would continue to increase, as they have done over the past three years. While house sales have increased since 2011, they are slightly lower than last year. Although there is still one month remaining in the year, following the trend of 30 sales per month, sales numbers will not reach last year’s level.

One of the highest selling properties for the year was 4 Seafarers Crescent, Robe, which is a modern 4-bedroom, 2-bathroom dwelling with ocean views approximately 20 metres from the beach. The property sold in February for $1,375,000.

Overall, we give ourselves a score of nine out of ten for our 2015 predictions. While we weren’t spot on, we did predict a positive outlook for the year and with no major drop in house sales or prices, 2015 has been a positive year.

www.smartline.com.au

Please note that information in this publication is subject to change without notice. Smartline assumes no responsibility for any errors, omissions or mistakes in this document. © Smartline Home Loans P/L 1999 – 2015. Australian Credit Licence Number 385325

 

Share on:

DISCLAIMER: The information contained in this article is correct at the time of publishing and is subject to change. It is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, Smartline recommends that you consider whether it is appropriate for your circumstances. Smartline recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.