Going Against the Norm Adelaide Prices Rise Despite National Decline.
Property prices across most of Australia have taken a hit during 2020 because of COVID-19 shutdowns, but those in Adelaide are rising.
After a brief drop in June, Adelaide property prices are back on the rise despite the overall national decline, particularly in Melbourne, Sydney and Perth.
Adelaide’s latest home value index reveals the city’s median property value climbed 0.1 per cent in July to $441,826 according to CoreLogic.
Since the article “Adelaide Rental Market Remains Strong Despite COVID-19“, there was a 0.2 per cent drop in June, 0.4 per cent increases in both May and April and a 0.3 per cent increase in March.
In fact, Adelaide was one of two Australian capital cities to record growth, in July, with Canberra recording a 0.6 per cent increase.
In contrast, Melbourne recorded the largest decline in July (1.2 per cent), followed by Sydney (0.9 per cent), Perth (0.6), Brisbane (0.4), Darwin (0.3) and Hobart (0.2).
Salvan’s Property Managers note that due to the lack of quality rental properties available compared to the number of people wanting to rent, the market was still pushing property values up in Adelaide.
Natalie Salvati, Principal of Salvan Property Management, says “As long as the demand is higher than the number of available quality properties, this trend is likely to continue.”
As we head into Spring, traditionally the number of properties for sale and properties for rent increases significantly, so we’ll wait to see if that happens across Adelaide metropolitan suburbs to property values.
Across Australia, the median property value fell for a third consecutive month, recording a 0.6 per cent decline to $552,912 in July, only slightly better than June’s 0.7 per cent drop.
The impact from COVID-19 effects on residential housing values has been mild to date, with CoreLogic’s national index falling just 1.6 per cent since the high in April, and housing turnover has recovered quickly after its sharp fall in late March and April. The outlook remains somewhat uncertain though as government support is set to reduce towards the later part of the year.
Nationally, residential rents have slumped to new lows during the COVID-19 pandemic. While this is good news for tenants looking for cheaper places to rent, the downturn also comes with a significant silver lining for investors.
According to consumer price index (CPI) data, over the June quarter rents across Australia as a whole fell by -1.3 per cent. This is the first quarterly decline on record and is also reflected in rental yields. However rental searches on realestate.com.au are up 39 per cent over the June quarter. Statistics from those searches reveals that tenants and prospective tenants are looking more often, looking for longer and most significantly, the volume of ‘high-intent’ search activity on the website is up an unprecedent 75 per cent for June.
The expected result of the very large number of prospective tenants wanting to find properties for rent, especially across Adelaide, will keep property values and rental returns high for investors.