Adelaide home values have continued their climb to a new record high, as REA Group’s May Home Price Index reveals Adelaide’s new median now sits at $1.026m.
This is up $10,000 on last month’s $1.016m – which marked the first time Adelaide home values had surpassed that of Melbourne.
According to the report, home (combined dwelling) prices across metropolitan Adelaide have climbed by 0.2 per cent over the past month to $947,000 – the equal second best performance with Brisbane and Perth – and sit just behind Hobart where values are up by 0.3 per cent.
Adelaide home values are up by 13.9 per cent over the past 12 months, earning it a middle-of-the-pack position behind Perth, Brisbane and Darwin, with Perth leading the way with home prices up 21.5 per cent.
The report shows Adelaide home prices are up $123,400 on this time last year, ahead of the average for capital cities nationally of $100,800, no doubt dragged down by the performance of both Melbourne and Sydney’s respective modest $34,100 and $79,200 increases.
The two cities were the only two where values declined for the month, with Melbourne home prices dropping 0.3 per cent, and Sydney prices down 0.5 per cent.
Adelaide’s median house value has surpassed Melbourne. Picture: Brenton Edwards
According to the report, Adelaide house price house prices are up 0.1 per cent over the past month and 13.6 per cent or $132,200 over the past year, while units are up 0.7 per cent over the past month and 15 per cent or $93,300 over the past year to $700,000.
Report author, REA Group senior economist Eleanor Creagh said national home prices edged lower in April, suggesting a turning point in the housing cycle.
“Momentum has clearly slowed, marking a transition from broadbased growth to a more uneven, multispeed phase.
“Rate-sensitive inner-city markets are leading the shift, particularly in Sydney and Melbourne, where price declines have emerged after back-to-back interest rate rises.
“Overall, the housing market is rebalancing as demand softens and growth momentum eases.
“Auction clearance rates have softened pointing to a growing mismatch between buyer and seller expectations.
“At the same time, higher interest rates are reducing borrowing capacity, while uncertainty is weighing on confidence.”
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REA Group senior economist Eleanor Creagh
Ms Creagh said while price growth is expected to slow, a large correction remains unlikely.
Strong equity buffers, a resilient labour market and limited forced selling are helping to stabilise conditions and cushion price falls.
“Population growth and ongoing supply constraints exacerbated by higher construction costs and elevated interest rates continue to place a floor under prices,” she said.
“The adjustment is expected to be gradual, but slower growth and further price declines are likely.”
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Regional SA values continue to shine, with combined dwelling values up 0.4 per cent for the month and 12.8 per cent or per cent or $58,900 for the year and 96.7 per cent over the past five years.
Its combined dwelling median is $513,000.
Regional SA’s median house price sits at $520,000 – also up 15.8 per cent for the year, or $58,600 – while units continue to offer a more affordable entry point at $472,000, despite gains of 0.9 per cent over the past month and 15.8 per cent over the past year.
Turner Real Estate managing director Lachlan Turner
Turner Real Estate managing director Lachlan Turner said recent international conflict was affecting market confidence, but that the local market would weather that storm.
“The ongoing conflict in the Middle East has introduced a layer of uncertainty that is being felt across Australia’s property market, with rising inflationary pressure and back-to-back rate hikes contributing to a more considered buyer outlook,” he said.
“What will keep property markets resilient, is the ongoing undersupply issue, which we did not have when covid arrived, or during the Global Financial Crisis.”
“With stock still well below levels from one year ago, the city continues to be one of the stronger performing capitals in an increasingly fragmented national market.”
Mr Turner said the Malinauskas government’s recently abolished stamp duty for South Australians aged 60 and over purchasing a newly built or off-the-plan home under $2 million had fuelled activity in that segment of the market.
“The saving of up to $103,830 per transaction removes one of the most cited barriers to downsizing and makes South Australia the most generous state in the country for downsizer incentives,” she said.
“On the rental front, conditions remain tight.
“The vacancy rate sits at just 0.8 per cent, with house rents steady at $690 per week and unit rents continuing to climb to $565.
“For investors, this sustained yield environment keeps entry-to-mid-tier assets firmly in focus.”
