Urgent Warning for Adelaide Property Market
Summary
TLDRAdelaide's housing market has seen a significant surge, with the median house price exceeding $900,000 for the first time. Despite predictions of flatlining, property prices have risen by 14.4% year-to-date, with the fastest growth rate since May 2022. Rental vacancy rates are at an all-time low, indicating a severe undersupply of rental accommodation. The South Australian government's recent abolition of stamp duty for first-time home buyers and extension of the first-homeowner grant are expected to further stimulate demand. However, this may exacerbate the housing shortage and drive prices higher, emphasizing the need for strategic property investment and due diligence.
Takeaways
- 🏡 Adelaide's median house price has soared above $900,000 for the first time.
- 📈 Property prices in Adelaide have increased by 14.4% year-to-date.
- 🚀 The rate of price growth in Adelaide is the fastest it has been since May 2022.
- 🏠 Adelaide has the lowest rental vacancy rate among all Australian capital cities.
- 📊 Adelaide's long-term average vacancy rate shows the biggest undersupply of rental accommodation.
- 📉 Some areas in Adelaide, like Woodville West and Kilburn, have seen property prices drop.
- 💼 South Australia currently has the lowest unemployment rate in the country.
- 🥇 South Australia's economy was recently ranked the best in the country for the first time in 15 years.
- 🏘️ The South Australian government has abolished stamp duty for first home buyers building new homes.
- 🔮 Adelaide property prices are expected to continue rising due to a combination of housing shortages, economic strength, and government incentives.
Q & A
What is the current situation with the median house price in Adelaide?
-Adelaide's median house price has reached over $900,000 for the first time, marking a significant increase and making the dream of buying a home increasingly unaffordable for many.
What was the initial prediction for Adelaide's property market at the start of the year?
-At the beginning of the year, there were predictions that house prices in Adelaide would remain stable or 'flatline', contrary to the current soaring prices.
How has the rate of property price growth in Adelaide changed recently?
-The rate of property price growth in Adelaide has been accelerating, with the last 3 months showing the fastest growth since May 2022.
What does the rental vacancy rate indicate about the Adelaide property market?
-Adelaide has the lowest rental vacancy rate in the country, indicating a high demand for rental properties and a potential undersupply of housing.
How does the current vacancy rate in Adelaide compare to the long-term average?
-The current vacancy rate in Adelaide is significantly lower than the long-term average, suggesting a substantial undersupply of rental accommodation.
What does the report suggest about the need for additional homes in greater Adelaide by 2050?
-The report indicates that greater Adelaide needs an additional 300,000 homes by 2050 to meet the growing demand, highlighting the need for rezoning and construction to prevent a housing crisis.
What is the current state of building approvals in South Australia?
-South Australia has the highest number of new building approvals, but it is not sufficient to meet the demand, indicating a need for more construction to address the housing shortage.
How have property prices in certain areas of Adelaide been affected recently?
-While overall property prices in Adelaide are rising, certain areas such as Woodville West have seen significant drops in housing unit prices, suggesting market variability.
What is South Australia's current economic strength in terms of unemployment figures?
-As of March of this year, South Australia had the lowest unemployment rate in the country, reflecting a strong job market.
What major policy change has the South Australian government implemented to boost housing supply and home ownership?
-The South Australian government has abolished stamp duty for all first home buyers who build new homes and extended the first home owners grant, aiming to stimulate demand and increase housing supply.
What potential impact could the new policy of abolishing stamp duty have on property prices in South Australia?
-The policy could lead to increased demand for properties as the savings from abolished stamp duty can be used towards deposits, potentially driving property prices higher due to the existing housing shortage.
What advice is given for potential property buyers in Adelaide considering the current market conditions?
-Due to the variability in property price growth across different areas of Adelaide, potential buyers are advised to conduct thorough due diligence and consider areas with undersupply to make informed investment decisions.
Outlines
🏠 Adelaide's Housing Market Soars
The Adelaide property market has seen a significant increase, with the median house price surpassing $900,000 for the first time. Contrary to initial predictions of a flatline in prices, the market has experienced a 14.4% increase year-to-date, with the fastest growth rate since May 2022. The city has the lowest rental vacancy rate in the country, indicating a significant undersupply of rental accommodation. A report suggests that an additional 300,000 homes are needed by 2050 to meet the growing demand, highlighting the potential for a housing crisis if land is not rezoned. Despite the highest number of new building approvals in South Australia, the demand is still not being met.
📈 Boosting Home Ownership in South Australia
The South Australian government has introduced measures aimed at increasing home ownership by abolishing stamp duty for first home buyers who build new homes and extending the first homeowners grant. This initiative, part of the 2024-25 budget, is expected to cost $30 million over four years and remove property value thresholds for both the stamp duty exemption and the grant. The move is anticipated to stimulate demand, potentially exacerbating the existing housing shortage and driving property prices higher. The impact of similar federal government incentives in the past has been to increase national property prices, suggesting a similar outcome for South Australia. The summary advises that while the property market in Adelaide is set to rise, careful consideration is needed as certain areas are experiencing a drop in prices, and economic strength varies.
Mindmap
Keywords
💡Median House Price
💡Property Market
💡Vacancy Rate
💡Rental Undersupply
💡Housing Demand
💡Land Shortage
💡Building Approvals
💡Economic Strength
💡Stamp Duty
💡First Home Buyers
💡Supply and Demand
Highlights
Adelaide's median house price has reached over $900,000 for the first time.
Contrary to predictions of flatlining, Adelaide's property market has seen a 14.4% increase in property prices year-to-date.
The growth rate of Adelaide's property prices is the fastest since May 2022, indicating an acceleration in price growth.
Adelaide has the lowest rental vacancy rate among all capital cities in Australia.
The gap between the current and long-term average vacancy rates in Adelaide is the largest, indicating a significant undersupply of rental accommodation.
Greater Adelaide needs an additional 300,000 homes by 2050 to meet the growing demand driven by single-person households.
South Australia is facing a potential land shortage within 30 years if drastic changes are not made to address housing demands.
Despite having the highest number of new building approvals, South Australia is not meeting the housing demand.
Certain areas in Adelaide, such as Woodville West, are experiencing a drop in housing unit prices, almost 9%.
South Australia had the lowest unemployment rate in the country as of March of this year.
The South Australian economy was voted the best state economy in the country, overtaking Victoria.
The South Australian government has abolished stamp duty for first home buyers who build new homes and extended the first homeowners grant.
The abolition of property value thresholds for stamp duty exemption and first homeowner grant is expected to cost $30 million over four years.
The new scheme is likely to stimulate demand more than supply, potentially driving property prices higher.
Adelaide property prices are expected to continue rising due to a housing shortage, increased incentives for demand, a strong economy, and tight vacancy rates.
Investors are advised to conduct due diligence when purchasing property in Adelaide, as some areas are growing while others are struggling due to oversupply.
Transcripts
the dream of buying a home is getting
further Out Of Reach for many with
Adelaide's median house price soaring
above $900,000 for the first time the
adelay property Market has been a
surprise to many when the year started
there were predictions that house prices
in Adelaide would Flatline but now we're
starting to see headlines about Adelaide
property prices reaching a grim
Milestone so today I'm going to look at
what's been happening to house prices in
Adelaide what's expected and why and the
one event that's just happened that
could change everything for Adelaide
house prices let's dive in hello it's
Nero here and if you're new to my
channel hit that subscribe button
because I talk about all things related
to the Australian property market and
the economy the Adelaide property Market
has been one of our strongest performing
markets year-to date property prices are
up an astonishing 14.4%
but what's even more amazing is that
when we look at the rate of growth over
the last 3 months the rate of growth is
actually the fastest it's been since May
2022 so that means that the rate of
price growth in Adelaide is actually
accelerating here's why I expect
Adelaide to continue to have significant
price growth first of all when we look
at this chart which shows the rental
vacancy rates across all of our Capital
Cities you can see the gray line which
is tracking Adela vacancy rate is the
lowest in the country that's right
Adelaide has the lowest vacancy rate in
the country not Perth as so many media
Outlets might lead you to believe and
this isn't a new phenomenon either it's
actually been the case for quite some
time here's an article from back in
September so roughly nine months ago
showing that Adelaide already had the
lowest vacancy rate in the country back
then and what's really scary is that if
we look at this next chart which tracks
the difference between the current
current vacancy rate versus the
long-term average the blue dots are
showing the long-term average the red is
the current vacancy rate and what you
can see is that Adelaide right now has
not only the lowest capital city vacancy
rate in the country the gap between the
long-term average vacancy rate and the
current vacancy rate is the biggest of
all the states showing it has the
biggest under supply of rental
accommodation right now and this is
purely because there just aren't enough
properties in Adelaide for its growing
population greater Adelaide needs to
build extra
300,000 homes by 2050 as single person
households Drive crisis South Australia
could run out of land within 30 years
unless drastic changes are made to meet
housing Demands a landmark report has
found greater Adelaide needs another
300,000 homes to meet Demand by 2050 the
greater Adel Regional plan it's a
discussion paper identifies that while
there's enough land for additional
200,000 homes the state will run out of
land within 30 years without an ongoing
resoning program so what that tells you
is that Adelaide and South Australia
have a major problem they don't have
enough houses they're about to run out
of land if they don't rezone so even
though we are starting to see that South
Australia is the state that has the
highest number of new bu building
approvals it's nowhere near enough to
meet the demand of course whenever a
state is looking to increase Supply just
like the new South wal state government
is doing in Sydney and now the South
Australian government is trying to do in
Adelaide you need to be careful you
can't just buy anywhere because property
prices in Adelaide are rising the
fastest that they have in the last two
years you still need to do your due
diligence because there are certain
areas that are actually falling right
now we have seen houseing unit price
prices has achieved new record highs in
Adelaide but they're not going up
everywhere Woodville West has seen the
biggest drop almost 9% followed by
Kilburn in the Eastern suburbs
hectorville is becoming more affordable
and when you're looking at the economic
strength of South Australia let's have a
look at the unemployment figures as of
March of this year South Australia had
the lowest unemployment in the country
now I do expect these figures will
fluctuate especially as South
Australia's population continues to
increase and for the first time ever the
South Australian economy was voted the
country's best state economy an influx
of construction completions an
increasing number of new builds and a
strong jobs Market has seen South
Australia top the leaderboard when it
comes to economic strength the southern
state known for its food and wine
overtook Victoria to take out the top
spot in comsec's latest state of the
states report for the first time in the
survey's 15 year history and now there's
been a major shift by the south
Australian government that I expect will
lead to even more sustained property
price growth stamp Duty officially
abolished for all first home buyers who
build new homes the Malin osus labor
government will officially abolish stamp
Duty for all first home buyers who buy
or build a new home and extend the first
homeowners Grant to all eligible first
home buyers as part of the 2024 to 25
budget to further boost housing Supply
and help more south Australians into
Home Ownership the 2024 to 25 budget
will abolish property value thresholds
for both the stamp Duty exemption and
first homeowner Grant at a cost of $30
million over 4 years with the abolition
of property value limits a first home
buyer who purchase a new dwelling
broadly in line with the median house
price of
$750,000 will receive a benefit of over
$50,000 including the first homeowner
Grant of
$155,000 but do you remember what
happened to property prices when the
Scott Morrison federal government
decided to give incentives for people to
build homes it drove property prices
higher on a national level I expect
you're going to see something similar in
South Australia because although this
scheme might be intended to increase
Supply what it actually does is it
stimulates demand why because now now
someone doesn't have to pay whatever
they had to pay in stamp Duty that 10 20
$30,000 that can be put towards a
deposit to get a new home so it actually
allows more people into the market yes
that's great but when you already have a
massive property shortage in South
Australia having this sort of scheme
only increases demand even more than
Supply as I showed you earlier there
already is a shortage of land in South
Australia so you can have all these
people want to buy but if there isn't
enough land you have more demand than
Supply driving property prices higher so
ultimately what's a verdict on Adelaide
property prices are set to keep Rising
for quite some time yet on a broad level
we have a massive housing shortage there
we have increased incentives for demand
strong economy tight vacancy rates but
you can't just buy anywhere in Adelaide
certain areas will continue to grow
driven by the massive under Supply While
others will struggle because of over
Supply you need to do your due diligence
if you want help with that check out the
link in the description below to get
totally for free the audio version and
digital version of my book otherwise
I'll see you next time
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