Adelaide the ultimate environment to raise a family says Raine & Horne GM

NOVEMBER 22, 2021

Adelaide SA (21 November 2021) South Australian real estate has enjoyed one of its best years on record, and several leading property experts believe the state's combination of family-friendliness, combined with real estate, and lifestyle affordability, will underpin property market activity in 2022. 

 James Trimble, General Manager, SA, Raine & Horne, says record low-interest rates will continue to fuel demand for real estate in suburban and regional South Australian markets in 2022. 

 "With the Reserve Bank signalling it won't touch the monetary policy levers in 2022, money will remain competitive despite the intentions of the banking regulator," he said 

 "Despite the median price for Greater Adelaide rising by more than 20% over the last year, and by almost 35% in inner-city markets such as Unley, housing prices in Adelaide still represent fantastic value compared to Sydney, Melbourne and even Hobart.”

 Massive saving on private school fees

Mr Trimble continued, "In 2021, housing prices caught up with the true benefits of owning property in South Australia, such as the brilliant lifestyle, brilliant schools, and brilliant housing affordability. Most homes are just 10 minutes to the beach, 10 minutes to Adelaide Hills which makes Adelaide the ultimate environment to raise a family." 

 While property in Adelaide can be as much as 50% more affordable than Sydney, cost-of-living expenses are also be significantly cheaper. According to numbers crunched by Raine & Horne, the price of private schooling in Adelaide, for example, is about 60% cheaper than in Sydney.

 "Ignoring CPI increases, it is possible to save more than $600,000 on Year 7-12 school fees for three children by sending them to the likes of prestigious Pembroke School or St Peter's College rather than best private schools in Sydney. To put this saving in context, the median Adelaide dwelling price is less than $544,000," said Mr Trimble. 

Mr Trimble believes the rollout of the NBN will also continue to play its part in attracting homebuyers to South Australia from the eastern states. "The working from home movement has allowed NSW and Victorian ex-pat buyers to shift their psychology, architectural or marketing business to properties on Adelaide's rural fringes or the suburbs. We are confident this trend will continue with gusto in 2022."

 Inner ring suburb growth driven by low rates and stock levels, plus more interstate buyers

In inner blue-chip Adelaide suburbs such as Unley, Burnside, Kensington Gardens, and Hyde Park, home to Walford Anglican School for Girls, property values rose by almost 35% in the 12 months to October 2021.

Mr Con Pappas, Co-Principal of Raine & Horne Unley, says inner Adelaide property values have been driven by a combination of low-interest rates, a shortage of stock and interstate demand. 

 “We have plenty of local buyers seeking to upgrade into inner-ring suburbs. However, we expect migration from the eastern states to shift up a gear in 2021.

 “Our property prices are still affordable compared to Sydney and Melbourne, and by living in Unley and other inner-ring suburbs, homeowners have access to some of the best private schools in Adelaide. 

 Mr Pappas added, “Most of the interstate buyers are moving their businesses to Adelaide or buying holiday escapes, while we’ve seen a surge in Melbourne buyers that seem to be escaping the politics of lockdown in that city.”

 SOMO, not FOMO, drives some regional sales. 

 Mr Paul Clifford, Rural SA Specialist from Raine & Horne Rural SA based out of Strathalbyn, says that the rural lifestyle market on Adelaide's fringes enjoyed a very consistent year with growth of 15% - 20% and some phenomenal sales. 

 "We've had a consistent 2021 with on average every third rural lifestyle property sale achieving a price that exceeded vendor expectations by as much as 20-30%, a result often driven by significant buyer interest," Mr Clifford said. 

 "At one open for a lifestyle property this year, we had as many as 270 people at the Sunday inspection recently, which is more like an open for a house in Sydney than rural South Australia."

 In 2021, Mr Clifford identified a spin-off of the FOMO (fear of missing out) trend in rural South Australia real estate. "We sold rural properties this year to SOMO (sick of missing out) buyers who indicated to me they were tired of searching online for properties or visiting open homes and were prepared to pay more to achieve a result. The SOMO factor drove some of the more significant sales we settled in 2021.”

 Looking ahead to 2022, Mr Clifford believes the rural lifestyle markets will stabilise, although interstate buyers will continue to play a significant role. He said, "Since COVID, there has been pent up demand for people wanting space, who want to grow a few veggies or raise a few chooks. 

 "You can also still live within an hour from the CBD in such areas as Strathalbyn, Mount Compass, Hindmarsh Valley, Kuitpo, Meadows and others, and this factor is attracting Adelaide locals as well as ex-pats from the bigger cities such as Sydney and Melbourne. We expect this lifestyle property trend to continue in 2022. 

 "Better still, the interstate buyers like the fact they can secure these lifestyle acreages for well under $1 million.”

 To illustrate, Raine & Horne Rural SA has listed for sale a freestone 3-bedroom cottage on a 2.387-hectare property at 3770 Victor Harbor Road, Hindmarsh Valley, for $800,000. 

 "The interstate ex-pats are moving to an SA rural lifestyle property because the rollout of the NBN allows them to run their consultancy or service business from home a few days a week and easily commute to Adelaide CBD the other couple of days,” Mr Clifford concluded.