Comparison of Adelaide residential property with Australia capital cities in 2018

1.0 Introduction.

In the last ten years Adelaide has had consistent positive growth between 1% and 4% annually.
Far less than the capital growth many of the capital cities have experienced in the same time period.
Economic forecasters are predicting that Adelaide and Canberra are likely to experience greater economic growth in 2018 than other Australian capital cities. (ANZ Property forecast 2018).

2.0 Positive economic data for Adelaide:

1/ The Federal Government forecast that $89 Billion dollars will be spent on the Future frigates and new submarines. JLL is forecasting creation of at least 1,850 jobs in SA over the next 40 years.

This should create greater demand for Property in terms of new builds and the rental market.

2/In the March 2018 quarter Adelaide experienced a positive capital growth of 1.5%. Sydney, Melbourne and Brisbane all experienced negative growth in the same quarter. Source ABS.

3/UBS 2018 stated that Melbourne and Sydney require 8 and 9 times annual income respectively to purchase the median valued property. Adelaide’s multiple is in the 5’s creating better value not just for the capital purchases but also rental yields. Much easier for a first home buyer in SA.

Just over 40% of our clients are from Melbourne and Sydney who recognise the value in Adelaide.

4/Hobart has been the cheapest capital city in Australia by a significant margin due to its isolation.

This is not currently the case as Hobart has experienced a capital growth of 12.7% in the last year to 30/6/18 (Real Adelaide median is $439,215, Hobart is $436,899.

This similar median value provides opportunities in Adelaide due to Hobart’s isolation and larger capital growth in the last year than Adelaide’s (1.1% in 2018) (Corelogic).

5/Corelogic recently compared buying power in Adelaide V other capital cities. The article compares how far out of the CBD it is to purchase a $ 500 K unit:

Sydney – Punchbowl – 16 kilometres

Adelaide Kent Town – 250 metres

Melbourne Travancore – 4.5 kilometres

Hobart South Hobart – 2.8 kilometres

6/Change of the median Property value in the last 5 years to January 2018. (Real

Adelaide 18.4%          Melbourne 56.4%          Sydney 64.4%          Darwin -20%          Hobart 33.4%

3.0 Conclusions

Adelaide is likely to experience above average growth in the foreseeable future.