In just 12 months, land prices in Greater Adelaide went up by 8.5 per cent, reaching $205,000 and a median price per square metre of $465.
The latest data, as analysed by Oliver Hume, reveals that the municipalities of Barossa (4.9 per cent growth), Gawler (18.3 per cent growth), Mt Barker (15.1 per cent growth), and Playford (10.1 per cent increase) were among the key greenfield markets in and around Greater Adelaide that had the greatest increases in year-over-year growth.
The Reserve Bank of Australia’s decision to raise interest rates in May had an influence on sales volumes throughout May and June. Still, they remained above long-term norms, with roughly 1,000 homesites sold during the three months compared to 800 over the previous three months.
Despite more sales, the median size of lots sold on the Greater Adelaide market has decreased progressively over the past two years, as increasing costs have driven buyers to adapt their budgets and preferences.
Reflecting on the data, Julian Coppini, the chief executive of project marketing at Oliver Hume, said the Adelaide land market was like the established housing market in that prices continued to rise steadily in the June quarter, even though interest rates were going up.
“Together with South East Queensland, the Adelaide market is one of the healthiest in the country, with relatively good affordability and a healthy supply of stock coming to market,” he commented.
“While prices have increased in the recent cycle and are around peak levels, affordability will continue to be the dominant factor in the attractiveness of the Adelaide market, with land considerably more affordable than many other markets around the country.”
Even though interest rates have gone up recently, which could see affordability drop, the head of national research at Oliver Hume, George Bougias, commented that the outlook for the Adelaide real estate market remained positive.
“Like all markets, we’ll see a slowing of sales volumes as buyers reassess their borrowing capacity and other considerations, but over the medium and long term, we should see steady growth underpinned by a strengthening economy and a return to steady population growth,” he added.