Barossa Valley, Mclaren Vale, and the Clare Valley are names that trip off the tongue of wine enthusiasts, but it would be interesting to know how many associate these famous wineries with South Australia.

You see - similar to Western Australia - the true bounties of South Australia have largely gone under the radar until the recent news of its property boom which has been driven by a combination of migration, a strong economy, low interest rates and stock levels, and an exciting array of infrastructure improvements. Even the savviest Australian property experts have been surprised by the numbers, although not so much its own population, we suspect, who have done their best to keep its many attractions a secret.

Adelaide's property market has been the talk of the town

Adelaide’s property market has been the talk of the town, with prices increasing by a staggering 44.7% between the pandemic low point and the July 2022 peak. The state’s capital has a current median house price of $800,000, outpacing other regional areas where the median price stands at $650,000 - although, these have also skyrocketed. 

CoreLogic concurs with these results. It highlights areas such as the Eyre Peninsula and Mount Gambier as great investment opportunities due to their affordability, desirable rental yields and potential for capital growth. According to the trusted property information source, the median house price growth in major towns has experienced a staggering 14.8% increase in the past 12 months to March and other top suburbs it recommends for investment include Christies Beach, Craigmore, Dover Gardens, Elizabeth Vale, Gilles Plains, Kurralta Park, Magill, and Munno Para.

“Adelaide is a very fundamentally stable market,” says Australian Property Investor

A diverse range of buyer types, from first home buyers and investors to downsizers have also helped fuel the boom, not to mention the state's successful handling of the pandemic, which helped it avoid any significant economic repercussions.

So what, in a nutshell, has facilitated this unprecedented boom in the South Australian property market? 

1. An excellent Infrastructure – South Australia's infrastructure is envied by the rest of Australia, with projects including the expansion of Adelaide Airport, the construction of the North-South Corridor and the development of the Flinders Link rail line. The state boasts the largest and most expensive hospital precinct, submarine and naval contracts and a growing technology sector.

2. A strong economy – Although some correction is predicted in the coming years, “The South Australian economy has experienced strong levels of economic growth over the past few years directly because of the COVID bounce back and subsequent economic boom from the national stimulus in the economy,” according to the SA government website.

3. Population growth – During the year to September 2022, South Australia’s Estimated Resident Population (ERP) increased by 1.4% (or 25,200 persons) to 1,828,700 people.

4. Low interest rates – Low interest rates have made the South Australian property market more accessible to buyers, although the full impact of the recent increases is yet to be felt.

5. Government incentives – For 2023-24, these included the abolition of stamp duty for eligible first home buyers buying a new home up to $650 000; the fast-tracking of first home builders’ applications and the introduction of a new home loan that enables eligible first home buyers building a new home to take out a loan with as little as a 2 per cent deposit.

6. The state's appealing lifestyle – South Australia is spoilt in terms of climate and landscape, and Adelaide, the fifth largest city in Australia, is also still relatively affordable, offering the dream of city-beach living to young families and retirees.

7. Low stock – A combination of factors has caused demand to outstrip supply, inevitably forcing up prices of existing property stock.

8. Improvements in internal migration – COVID-19 had a massive impact on internal migration, but the government is making it easier for migrants to move. Their Skilled and Business Migration program provides a clear pathway to living, working or establishing a business in South Australia through the support of State Nomination.

Adelaide and Regional South Australia have avoided the recent downturn experienced by other states

Over the past year, most major cities have seen some decline in the value of property and yet Adelaide, along with Perth and Regional South Australia, have managed to buck the trend.

“Since finding a floor in February, the national HVI is up 4.1%, following a -9.1% decline from record highs in April 2022…Nationally, home values remain -5.3% below the April 2022 peak, with only Perth, Adelaide and Regional South Australia recording a new cyclical high in dwelling values through July,” says CoreLogic.

In answer to our question, some correction is anticipated in the South Australia property market in the coming year, so if you're thinking of selling, there's no better time, and if you're thinking about buying, remember that the early bird catches the worm.

The early bird catches the worm

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