The One Capital City Property Market Not in Decline

Recently, Property Club ran a webinar looking at which capital city property markets are defying rising interest rates through solid rental returns and excellent capital growth. By coming up with different criteria, we were disheartened to learn that most capital cities across Australia currently have their property markets in decline. However, there was one that was still staying strong.

And that city was Adelaide. Despite the struggles of all the other capital cities around the country, Adelaide has remained strong and stands as one of the best markets for investors to buy in today. Let’s have a look at why that is the case.

Our Criteria for Looking at Different Property Markets

We know that when looking for a property market to invest in, savvy investors consider the following criteria:

• Has the market delivered good growth in the past?
• Will the rental returns from properties see you through interest rate rises?
• Does the property price fit your borrowing capacity?
• What does the future of the rental market look like?
• What are the prospects for future growth, and what drives that growth?

After considering those criteria, it seems there is one market that stands out above the rest - Adelaide! While all the other capital cities in Australia showed signs of struggle in this current market, Adelaide has emerged as one of the best places to invest in for Australians.

Adelaide’s Strong Property Market

According to CoreLogic, Adelaide is officially the fastest growing residential property market in Australia, outperforming all other capital cities, with annual median house price growth of over 25% in the last 12 months. The demand for rental accommodation in Adelaide is stronger than ever. The overall vacancy rate is about 0.3%, meaning that for every 1,000 rental properties in the market, only three are unoccupied.

Domain.com says Adelaide is the rental market with the lowest vacancy level – which is excellent for investors because rents are high and staying high. Our hand-picked Adelaide properties are repaying positive cashflow returns for investors even as interest rates rise. Adelaide's median house price remains affordable compared to the national average. According to corelogic.com.au, the median house price in Adelaide is $642,470 (compared to a national median of $937,101), and we have property options for investors priced from $467,000.

Joe Linco, an experienced Mortgage Broker, advises that as interest rates rise, people's borrowing capacity drops – so lower-priced properties with high returns become more attractive for lenders and investors alike. In Adelaide, good rental properties command high rents. Growth in Adelaide median rent was nearly 12% in the last 12 months, according to corelogic.com.au, and has no signs of dropping as demand for accommodation outstrips supply.

The Future of the Adelaide Property Market

The future of Adelaide is bright – with a growing population fuelled by interstate and overseas people rehoming themselves to Australia's most liveable city. The ever-increasing population is supported by growing employment in the infrastructure and defence industries, as well as technology and education industries. Adelaide's planned infrastructure investment level is the highest it has ever been, and three major defence contracts have secured defence employment for generations.

Many independent experts continue to support Adelaide as the best-performing national property market. Westpac noted that South Australia was the only major state where strong gains were still being recorded, with sustained growth expected.

Invest in Adelaide with Property Club

Join Property Club today to gain access to our wealth of member benefits. We help you on your property investment journey, including any investment plans in Adelaide’s booming market. To find out how we can help, contact our friendly team today at enquiries@propertyclub.com.au.