South Australia and Adelaide have beaten the typical third quarter slowdown as the latest quarterly data shows new record highs for both home and unit prices.
According to the Real Estate Institute of South Australia (REISA), the state’s median home prices showed an annual increase of 9.66% and a 1.49% increase quarter on quarter in the September quarter.
REISA CEO Barry Money said these results are significant as the third quarter of the year has traditionally been the slowest period for the housing market.
“Again, sellers are undoubtedly the winners thanks to the new record median price rising to $560,000 this quarter in metropolitan Adelaide,” he said.
Beaumont, Bridgewater, and Gulfview Heights are the three suburbs with the highest annual growth rates, at 89.9%, 85.5%, and 57.4%, respectively.
Sellicks Beach, Smithfield Plains and Broadview also performed strongly, with price increases above the state average.
However, in terms of sales, Mount Barker, Morphett Vale and Craigmore recorded the highest volume, followed by Mount Barker, Morphett Vale and Craigmore.
Mr Money said these suburbs have consistently registered increased demand for housing in recent months.
“This is a clear demonstration that affordability, development potential and rental yields are key drivers of buyer and investor sentiment,” he said.
Mr Money said the housing markets in South Australia and Adelaide continue to be a key consideration for many home buyers and investors looking to break into the market.
“Investors continue to flock to South Australia, attracted by relatively high rental yields but now strong capital appreciation,” he said.
“However, supply constraints and favorable macroeconomic factors such as interest rates and consumer confidence will continue to push prices up and make housing affordability an ongoing battle for first home buyers.”
New record for unit and house prices
Separate research from Domain showed that Adelaide’s home and unit prices are now at new record highs.
During the September quarter, home prices rose 5.6% to a new all-time high of $667,888.
Meanwhile, unit prices hit a new record with a gain of 5% to $357,615.
According to the report, Adelaide home prices have increased by $307 daily for the past 12 months to September, which is the largest on record.
“Businesses remain under pressure as demand exceeds supply and price growth remains positive. But there are signs that circumstances may change as house price growth moderates by a third from the previous quarter,” the report said.
While demand for purchases remained strong, it appears to be declining as home loan financing has begun to decline from their recent peaks.
On the supply side, the number of homes for sale fell by 28% below the five-year average.
“While conditions remain skewed towards sellers, as new listings track higher and buyer demand declines, supply should begin to normalize,” the report said.
Photo by Gilly Tanabose on Unsplash.