Adelaide May 2017

The month in review: Adelaide

By Herron Todd White
May 2017

The Adelaide market continues to be consistently stable. Sub-markets with limited supply continue to be strong. The March 2017 Core Logic Hedonic Home Value Index report noted that Adelaide dwelling values have increased 3.4% over the past year. We have continued to note increased developer activity in areas that have undergone zoning changes within the past couple of years. Given the Adelaide market’s propensity for detached housing, we will continue to monitor stock levels and market reaction to increasing in-fill and higher density developments. It will also be of interest to determine whether recent interest rate increases for investors will have an impact within the market.

Market sentiment is crucial within the Adelaide market. Current sentiment appears to be relatively positive, particularly in locations close to the CBD. The pending closure of the Holden manufacturing plant may cause a decrease in market sentiment in the northern suburbs. Potential flow-on effects of the pending closure are not yet evident. We will be monitoring the market, particularly in the northern suburbs, for any negative impacts.

Well-serviced areas in proximity to the CBD, which have limited supply of properties entering the market, continue to experience good demand. Beachside suburbs such as Henley Beach and Grange are perennial favourites and continue to be attractive to potential purchasers. Southern beachside areas such as Port Noarlunga are also attractive and although further from the CBD compared to the western beaches, they offer good access to the CBD via the Southern Expressway.

There are a number of high profile infrastructure projects currently underway including the Darlington road upgrade, Torrens-to-Torrens Roadway and O-Bahn tunnel construction on the city fringe. The Royal Adelaide Hospital is yet to move to its new site in the west of the city. Further infrastructure projects will be required in the next couple of years to continue to provide employment opportunities for South Australians.

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