A combination of historic low interest rates, comparative real estate affordability and South Australians returning from interstate and overseas are proving central factors in Adelaide’s huge rise in property values over the past year, a leading South Australian property expert says.
According to CoreLogic data, property values in the South Australian capital rose by 7.3 per cent in 2020, far outpacing capital growth increases in Sydney (2.8 per cent), Melbourne (1.3 per cent) and Brisbane (5 per cent).
Raine & Horne General Manager James Trimble said traditionally, many experts in the eastern states have viewed Adelaide “as real estate’s version of a balanced investment fund”.
“Adelaide property has historically delivered a combination of modest growth in the good times compared to the eastern state capitals,” Mr Trimble said.
“However, when those markets slow, Adelaide property generally continues to deliver excellent returns to owner-occupiers and investors.”
According to Mr Trimble, the South Australian Government’s record in managing the COVID-19 pandemic has also been a big contributing factor in drawing attention to the southern state’s combination of lifestyle and real estate affordability benefits, which has helped drive growth off the charts.
“Population growth has been something of an Achilles’ heel for the Adelaide market,” Mr Trimble acknowledged.
“But with our excellent health record and the fact that more Australians have recognised they can work from home, there’s been a spike in South Australians returning to their state of origin.”
Mr Trimble said many former residents now living in other parts of the country were seeking to return to Adelaide, with interstate inquiries up by 30 per cent in some Adelaide markets.
He also said an estimated 400,000 expatriates have returned to Australia since the start of the pandemic and “a portion of this returning diaspora is seeking to call Adelaide home”.
“This is almost the equivalent of the population of Canberra returning to Australia, and they need somewhere to live,” he said of the number of Australians living overseas that have returned to the country.
“Throw in the acceptance of technology, the realisation you don’t have to live and work in the eastern capital cities anymore, low interest rates – plus Adelaide’s values are about 50 per cent more affordable than Sydney – and this combination is proving the perfect mix for property price growth.”
