Property Market Update – Adelaide
- Unemployment in South Australia is significantly higher than the national average, at 7.1 %, but it remains below the state’s long term median of 7.6%.
- Growth in the house market over the last 12 months has been a moderate 3.20%, however this is below its 20 year long-term average rate of growth (6.80% per annum).
- Growth in the Adelaide unit market failed to keep pace with inflation over the last 12 months.
- Rental yields in the house and unit markets have increased in the last 12 months, by 4.11% and 1.64% respectively. Yields in both markets are currently above the national average, but they are probably not sufficient enough to drive investment activity.
- Affordability in Adelaide is amongst the best in the nation, for home ownership and rent.
- It currently takes around 30% of the median household’s after tax income to make loan repayments on the median house, while renting requires 25% of after tax income.
- The affordability position is further improved in the unit market, where the median household uses around 22% of after tax income to meet home loan repayment.
- Calculations estimate that there is an oversupply of housing stock of about 4,000 dwellings.
- 5 year predictions indicate that house and unit prices will struggle to keep pace with inflation.
- Overall, this is not a market for investment unless you are able to identify an attractively priced renovation property.