Adelaide Market Update- Beware Of Stock Issues
Adelaide has weathered the recent property slowdown reasonably well, coming out the other side in far better shape than the neighboring capitals of Melbourne and Sydney. While other markets across the country have dropped considerably from their tops, Adelaide continues to be resilient. Since its peak, property prices are down only 1.3%.
For the month of July, Adelaide had held up as Australia's third strongest property market, with property values falling by only 0.4% during this period. Rental yields are still relatively solid at 4.5% with vacancy rates at a low 1.2%
Ripehouse Advisory CEO, Jacob Field claims that “Adelaide is typically a stable and subdued property economy, but following the contraction of Sydney and Melbourne has been a strong performer with increasing national investor interest holding into the new financial year.""
While across the nation, investor sentiment seems to be on the up, issues surrounding supply, however, may pose a problem for investors looking to purchase in Adelaide.
According to director of National Property Buyers, Katherine Skinner “July saw a short supply of quality investment stock across many areas throughout metropolitan Adelaide.
“While positive investor sentiment has been seen post-election, rate cuts and lending adjustments, this confidence, along with the lack of quality investment stock can pose significant risks to inexperienced investors who are keen to jump the gun just to get a purchase made,"" said Ms. Skinner.
On the flip side, investors need to be cautious of any new stock entering the specific areas they are looking to invest in, as this may impact the growth prospects of their investment.
“We must understand, that in national terms, Adelaide generally exhibits low population growth, making it fickle to even the slightest amount of new property supply entering the market.
“With this in mind, we see the strongest potential for mid-term growth in the middle market areas, locked between the port to the north, the beach and the CBD. Buyer demand has powered through the winter months in these areas, making snapping up a good buy difficult but worthwhile,” said Mr. Field.
So while the investment gold is out there in the Adelaide market if you are prepared and do your research, taking a scattergun approach to your property selection is a risky prospect.
“There are a variety of strong investment opportunities within the Adelaide market to fit every budget, which will see good growth and solid rental yield. Without strong local knowledge or professional advice, it may pay to sit tight until mid-late August when the flurry of pre-market Spring stock start coming through.
“This will provide a great opportunity to get the right investment secured at the right price, within the right location,” said Ms. Skinner.
July snapshot - Adelaide in numbers