WHILE most of the country was experiencing a housing downturn throughout 2022, South Australia’s dwelling values continued to grow.
According to a whitepaper from InvestorKit, South Australia’s housing market was unique over 2022 due to its affordability, economic recovery, improvement in internal migration, and heavy infrastructure investment.
The whitepaper noted CoreLogic data which showed that Adelaide’s dwelling value was up 10% and regional SA by 17% even during the near-year worth of consecutive interest rate hikes by the RBA.
“Several SA3 regions in South Australia have been exhibiting impressive performance since the beginning of 2022, and it’s also been a top performing state across the country,” said Arjun Paliwal, founder and head of research at InvestorKit.
The best performers over the last year included Barossa, Mount Gambier, Tea Tree Gully, Onkaparinga and Adelaide Hills, with all five expected to continue to see strong results throughout 2023.
“The top five regions have displayed robust economic growth, with high Gross Regional Product (GRP) growth and historically low unemployment rates that have remained at their lowest level in the past ten years,” added Paliwal.
“They have demonstrated exceptional performance in the preceding year, and based on their economic and property market indicators, it is expected that they will continue to outperform in 2023.”
Barossa
Barossa still holds a relatively affordable median house price of $465,500 after increases of 13.5% over the last 12 months, reflecting 47.8% growth over the past 10 years.
“Although the sales volume is slowly trending down and the price is not growing as fast as last year, we do not see its growth stopping anytime soon considering the high market pressure and affordability,” said Paliwal.
Only 16% of Barossa’s total properties are rentals, leading to an extremely tight vacancy rate around 0.1%, with rents surging and yields at 4.5%.
Mount Gambier
With a median house price currently sitting at $380,000 after a strong boost in early 2022, the second largest city in SA saw a 26.7% increase over the last 12 months and 61.7% in the last decade.
Mount Gambier’s rental vacancy rates also reached their lowest level in 2022 at 0.5%, with rents growing by 48.9% over the decade and yields at 5%.
Tea Tree Gully
Tea Tree Gully’s median price still sits lower than Greater Adelaide’s $645,000, at $620,000, despite having surged by 42% in two years compared to Adelaide’s 31%.
Over the decade the median house price was up by 74.6%. The rental market has a vacancy rate of 0.2%, with yields at 4%.
“Although Tea Tree Gully is currently slightly overvalued, it is still relatively affordable compared to many other Adelaide sub-regions that offer similar facilities and lifestyles,” said Paliwal.
Onkaparinga
Onkaparinga has one of SA’s most affordable median house prices, at $575,000. Over the past year, the median house price grew by 16.8%, with the decade seeing increases of 74.8%.
“The region’s unemployment is not the lowest in Greater Adelaide but has improved a lot in recent years, and now sits at the lowest level in a decade. The $5.4 billion worth North-South Corridor is set to further boost the local economy by creating thousands of jobs and business opportunities,” added Paliwal.
Onkaparinga’s rental market is extremely tight, with a vacancy rate of around 0.1% over the last year, with rents surging and pushing up the rental yield to 4.3%.
Adelaide Hills
The medium house price for the Adelaide Hills increased by a total of 15.6%over the last 12 months to $651,200, reflecting a 58.8% increase over the decade.
The vacancy rate sits at 0.3%, with rental yields at 4% and rents up by 40.8% over the past decade.
