PointData’s Lay of the Land Fall Edition published this week found that 88 per cent of Adelaide properties saw price growth of more than 10 per cent in the six months to February 2022.
Furthermore, 95 per cent of properties grew more than five per cent in value over the same period, which equates to almost 19 out of 20 properties in Adelaide.
The numbers contrast sharply with the same numbers reported by PointData at this time last year, when just 12 percent, or three out of 25 properties, were experiencing price growth of more than five percent.
PointData also identified the small inner southern suburb of Everard Park as Adelaide’s fastest growing property market, taking over from Sellicks Beach.
Everard Park, which currently has a median sales price of $894,700, posted annualized three-month price growth of 55.7 percent in the three months through February, ranking above Beaumont (50 percent), Royal Park (46.6 percent) and Marden. (46.6 percent).
Only three of the fastest growing price areas were in Adelaide’s eastern suburbs, reflecting a continued move away from the lucrative area as the center of the city’s property boom.
Three suburbs from the outer south of Adelaide made the top 10, as did two from the north-west of the city.
PointData, which released the report shortly before the Reserve Bank raised the cash rate to 0.35 basis point on Tuesday, said impending interest hikes and signs that the housing boom is slowing in the states East could eventually translate to Adelaide, although history suggests that “it tends to occur significantly later and to a much lesser extent”.
“What is considered typical of the Adelaide residential real estate market has well and truly changed, with levels of growth that many thought impossible (or at least extremely unlikely) being seen for almost the entire two years since the start of the pandemic,” the report states.
“While there are no strong indications that the Adelaide market is starting to slow down, other states in Australia (particularly the eastern states) are showing such signs.
“Potential buyers in eastern states are beginning to withdraw from the market, fearing rate hikes and subsequent price declines.
“While this behavior has not yet been [documented] in Adelaide, it would be a bit of a surprise if it came up soon.”
The report comes just days after data from national property research firm CoreLogic found that property values in Adelaide grew faster than any capital city in April at 1.9 per cent. Quarterly and annual price growth figures in Adelaide were also the highest in Australia
It also comes after a damning Anglicare study revealed the extent of rent unaffordability in South Australia. Their report found that only two listed rental properties out of 1,125 listed on the weekend of March 19 were affordable for a single person in SA on minimum wage.
PointData, which described the Adelaide price growth described in its report as “truly unprecedented for the market”, partly attributes the boom to buyers’ perceptions of housing supply.
PointData’s head of planning and delivery, Ben Russ, said there has been “a perception of a supply shortage in the market” due to a continued drop in online real estate listings combined with an increase in sales.
“The imbalance between perceived supply and demand warrants high settlement rates, meaning vendors don’t go full campaign as often, causing this reduction in online listings while increasing sales,” Russ said. .
“The perception of the sheer magnitude of the supply squeeze caused by the lower online price watchers is itself driving prices higher, as the perceived need to be aggressive in the market becomes the prevailing attitude.”
House prices in particular are expected to come under pressure after the Reserve Bank started rolling Tuesday with the first interest rate hike in more than a decade.
The RBA raised the cash rate to 0.35 percent from a record low of 0.1 percent following its monthly board meeting and following last week’s rise in inflation to its highest level in more than 20 years.
RBA Governor Philip Lowe has warned that more interest rate hikes should be expected in the coming months, because without them inflation would rise substantially.
The Commonwealth Bank of Australia was the first of the big four banks to raise its standard rates on variable mortgage loans on Tuesday, passing through the full 0.25 percentage point increase.
ANZ and Westpac quickly followed suit, while National Australia Bank caught up with its competitors on Wednesday morning.
Prime Minister Scott Morrison urged all banks to pass on higher interest rates to depositors as well.
Only Westpac and NAB have announced savings rate increases so far among the big four banks.
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