The month in review: Adelaide
By Herron Todd White
The strongest market in Adelaide remains the inner eastern and North Eastern suburban middle market with housing prices ranging from $450,000 to $850,000. More specifically houses in areas such as the inner east in suburbs such as Norwood, St Peters, Gilberton and surrounds which continue to see solid demand.
Essentially this is related to continued low interest rates which is encouraging homeowners to upgrade and to a lack of supply of quality homes on the market. The sort of house one can get for say $600,000 to $700,000 will be a 2- or 3-bedroom cottage or small detached house on an allotment of 400 square metres to 600 square metres perhaps in need of some renovation. Renovated houses of this style will tend to be more in the $700,000 to $1 million price range in prime areas and are currently in good demand.
This market sector tends to be isolated from the currently negative sentiment surrounding houses in outer suburban areas where demand remains relatively slow and prices are stable but demand is flat. Price movements in the Metropolitan area are in the main relatively low with the annual rate of median price movement reported at 3.4% per annum. This means that if the inner sectors are holding up then the outer areas may be showing no or perhaps negative trend.
This sector should remain strong in the coming year and in fact has always been a strong performer. Many houses in the inner suburbs are still ripe for renovation or on allotments that are now well suited to redevelope. This together with the fact that this market is driven by middle to upper end socio-economic buyers means it is less affected by difficulties related to unemployment and lack of confidence. It is of note that the statistics provided by RP DATA (Core Logic) currently indicate annual changes in house Values in the inner local government areas of Burnside at 5.7%, Norwood Payneham and St Peters at 4.6% and Walkerville at 4.6%, whereas the outer Local Government areas show Playford to the north at 2.3% and Onkaparinga to the south at 2.6% . These are general statistics but but they support our view of the market.
For example: 13 Elizabeth Street Evandale Sold 9/11/2012 $595,000 Minor cosmetic upgrades undertaken (painting of facade, removal of carpet in bedrooms and polishing exposed boards). Sold 20/4/2015 $715,000