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Adelaide property prices starting to cool after a record run

The daily number of sales in metropolitan Adelaide has fallen dramatically this year, reverting back to pre-pandemic levels, according to new data.

The Real Estate Institute of South Australia (REISA) Viewpoints report shows the average number of daily property sales in the City of Churches has fallen from 54.9 in August 2021 down to 40.8.

REISA Chief Executive Officer Cain Cooke said it remained to be seen whether the drop was simply the market returning to normal or whether this year’s successive interest rate rises and climbing cost of living was having an impact.

“It is unclear at this stage whether the dip in daily property transaction activity is reflective of typical winter period sales or if the recent interest rate rises and cost of living pressures are causing vendors to think twice about selling,” he said.

Despite the drop in sales volumes, the report showed Adelaide’s median sale price had continued to climb, rising from $450,000 to well above $640,000 over the past two years.

In August last year the median sale price was $535,300, and just 12 months later it was $668,800.

In total, 250 Adelaide suburbs have recorded positive three month growth, but the market has started to cool a little, with 110 suburbs posting negative growth in the three months to September.

The suburbs experiencing the highest growth in the three months to September include Seacombe Heights at 5.9 per cent, Darlington at 5.9 per cent, and Auldana at 5.5 per cent.

Interestingly, the suburbs experiencing the highest level of price contraction over the past few months have been typically strong growth suburbs such as Joslin, Evandale and College Park, which have each had a reduction of more than five per cent.

The report also showed the proportion of properties growing by an annualised five per cent has reduced.

“In the six months to February 2022, over 95 per cent of properties grew by an annualised five per cent or more,” the report said.

“In the six months from February through to August 2022, the number of properties growing by an annualised five per cent or more decreased to 65 per cent.”

Mr Cooke said the Viewpoints report, prepared in partnership with pointData, also highlighted Adelaide’s affordability, including the suburbs with the highest proportion of properties that fall under a median price of $450,000.

The highest was Davoren Park in the north of the city, with 98 per cent of properties under that figure, followed by Hackham West (73 per cent), Mount Torrens (36 per cent), Taperoo (30 per cent) and Collinswood (22 per cent).

“The heatmap shows just how special Adelaide is,” Mr Cooke said.

“In other major cities, there wouldn’t be anywhere near the amount of suburbs within a 15km radius of our CBD that still offer the percentage of properties at an affordable price point like we do here.”

REISA Chief Executive Officer Cain Cooke.

But Mr Cooke said greater housing supply was still needed in Adelaide.

“It is our strong view at REISA that the time is now to action strategic policy that enables much more housing supply to enter the market in the next few years, otherwise we will see a market in Adelaide that is reflective of Sydney or Melbourne where first home owners have to purchase properties in areas that are hours away from their families,” he said.

“We believe that policies such as sensible urban infill and housing density need to come to the forefront to ensure we have supply that meets the market demand particularly in centres where infrastructure is already in place and families can access the support and services they need.”

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Rowan Crosby

Rowan Crosby is a senior journalist at Elite Agent specialising in finance and real estate.