The data is in: Adelaide's on the move and I expect significant price growth
Adelaide continues to deliver data suggesting a rising market – and further evidence that those who called the end of the so-called national property boom forget to look beyond Sydney.
The latest figures come from an analysis of Valuer-General’s data by the Real Estate Institute of South Australia. They confirm my own figures showing strongly rising sales volumes throughout Adelaide. The REISA report also provides evidence of the first signs of price growth.
This reinforces the findings of the Price Predictor Index, which suggest a rising Adelaide market in 2014.
I wrote on Property Observer last month:
“The standout market for me at the moment is Adelaide. The South Australian capital has more forward momentum than most of the capital cities. Given that this has not yet translated into major price growth, it represents an opportunity for investors.
“South Australia is the only capital city which ended 2013 with sales volumes rising significantly and carried that into the early part of 2014. Some of our cities peaked, in terms of sales activity, in early or mid 2013. Some ended 2013 strongly but made a lukewarm start to 2014.
“But SA is really just beginning its run.”
The REISA report indicates a 6.2% quarterly rise in the number of houses sold in metropolitan Adelaide. It says the median price rose 4% to $415,000.
I would expect more growth to follow, given the strong pattern of rising sales volumes.
Adelaide and South Australia seldom get the credit they deserve. They only attract national headlines when something negative happens, like the deferral of the Olympic Dam resources project or the closure of a major manufacturing enterprise.
I think few investors realise how much is happening there, particularly in the area of new infrastructure spending and development of new property markets, such as urban renewal projects in the inner-city areas.
Adelaide has major infrastructure projects happening with rail links, road networks, hospitals, education facilities and sports infrastructure.
I commented about two years ago that Adelaide had more infrastructure developments under way than did Sydney. This is no longer true, as the NSW state government has initiated some major projects more recently, but Adelaide remains a significant centre for infrastructure spending, relative to its size.
As the year progresses, I expect to see more from the South Australian capital in terms of rising property markets and significant price growth.
