Prestige Properties In Adelaide Pique Buyer Interest
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Prestige Properties In Adelaide Pique Buyer Interest

A combination of low Covid rates and lifestyle changes are putting more attention on the South Australian capital

By Michelle Singer
Mon, Feb 8, 2021 2:23amGrey Clock 5 min

Sandstone villas and opulent mansions in South Australia’s premier inner-city suburbs have become hot property for Adelaide house hunters looking for lifestyle as well as economic security.

While there’s been plenty of activity and attention placed on rural living and lifestyle areas, Adelaide’s inner-city listings too, particularly in blue chip suburbs such as Toorak Gardens and North Adelaide, have also been snapped up for record prices in the past few months.

Several driving factors have helped pique interest and confidence, not least the city’s handling of the pandemic—with less than 600 cases in total and four deaths.

As of December, its unemployment rate of 6.4% was no longer the highest in the country and its relatively affordable median house price of $509,978  and Australia’s historically low interest rates has contributed to its appeal.

Housing is half the price of Sydney, where median house prices have passed $1 million, and more than 60% cheaper than Melbourne’s median house price of $821,904.

Fox Real Estate principal Andrew Fox said there was uncertainty in the market around March and April but confidence returned quickly and activity and prices “went from strength to strength.”

“We were very fortunate in 2020,” he said. “Many generational top-end properties changed hands for excellent prices while low interest rates and low stock levels fueled the market.”

Sotheby’s South Australia director Grant Giordano confirmed that “a lot has been happening in terms of luxury sales” around Adelaide and said it still offers great relative value compared to other cities.

“These prestige properties are incredibly attractive, I always talk about the relative value of Adelaide, when you’re buying one of these properties, you’re buying tomorrow’s value today,” he said.

“It’s a city that goes through a cyclical cycle, once one big sale occurs, they all go and reset the market’s expectations.”

He said South Australians have adjusted their lifestyle habits as a result of the pandemic.

“People have more disposable income and are limiting discretionary buys and instead investing in their day-to-day lifestyle because they’re stuck at home,” he said.

“Many buyers are thinking ‘If I’m stuck at home might as well enjoy the space which I’m currently in’,” he said.

Williams Luxury managing director Stephanie Williams said 2020 brought about a distinct shift among Adelaide’s more affluent buyers, who sought larger properties that are better suited to the current “Covid lifestyle,” that include home offices, gyms, theatre rooms and outdoor areas.

“As we are all spending more time at home our needs have broadened somewhat to require these extra living environments and our high profile clients and professionals are now working from home more than ever before,” Ms Williams said.

“We also have a strong level of international relocations and ex-pats returning to Adelaide—as it offers excellent lifestyle options with very low levels of congestion,” she said. “Extremely low-interest rates, improved lending conditions from the banks, government stimulus and an absolute lack of supply in both sales and rental properties are also key fundamentals in driving the current market.”

“It’s very close to the perfect storm for vendors right now, as everyone wants to buy and only a very low number of people actually want to sell.”

Prestige Properties

Reputable and refined, North Adelaide is known for its stunning mansions and tall terraces on leafy lined streets, where a statue of naval officer and the state’s first surveyor-general Colonel William Light stands atop Montefiore Hill, overlooking the city he planned.

North Adelaide’s charismatic old homes and well-to-do residents have long defined the suburb’s distinct social, cultural and geographic differences.

All but one of Adelaide’s 10 most expensive homes were built in the 1800s and they remain highly sought after as proven in late 2020 when the historic North Adelaide mansion at Molesworth Street went under contract within three days of hitting the market.

North Adelaide mansion
Sotheby’s South Australia

 

Sold through Sotheby’s South Australia, the $4.5 million sale price made it one of North Adelaide’s most expensive transactions on record.

Neighbourhood amenities such as grand old pubs, modern hip cafes, gourmet supermarkets and a diverse range of restaurants contribute greatly to the village atmosphere, while the impressive and revamped Adelaide Oval sporting ground lies between the suburb and the central business district.

A walk along the River Torrens leads to the Adelaide Zoo, the city’s aquatic centre, and the education facilities, such as North Adelaide Primary, are not only among the state’s oldest but with Adelaide High School, among the top performers too.

The rich selection of amenities contributes significantly to the appeal, Mr Giordano said, with buyers eager to get into the area.

“Very rarely on the city fringe do you have such green and private living so conveniently laid out. When you’re talking about the Adelaide Hills or beach lifestyle, they’re lifestyle choices at the expense of convenience,” he said. “In North Adelaide, you make no compromise. It’s the closest suburb to the city and it has some of the grandest and most historically resonant properties in Adelaide.”

The exclusive location and quality of housing are what attracts the suburb’s two main demographics, Ms Williams said, with families attracted to the lifestyle and close proximity to elite schools while professional couples appreciate the cosmopolitan lifestyle, golf courses, parklands and close proximity to the Adelaide Oval.

Outlook 2021

Buyer interest in Adelaide is widespread. The number of eyeballs per online listing city-wide increased dramatically between 2019 and 2020, and according to CoreLogic’s head of research Tim Lawless, the city received minimal disruption during the pandemic.

“Adelaide housing values reached a new record high in November after recording five consecutive months of growth,” Mr Lawless said in his review of the 2020 market.

“Adelaide’s housing market has seen minimal disruption through the Covid period so far, only recording one month where values dipped lower—a drop of only 0.2% in June.”

Figures released by realestate.com.au also show suburbs such as North Adelaide are among the most sought-after by online house hunters, recording a 92% increase in views per listing in 2020 compared to 2019.

One of 2020’s hottest listings was an 1878-built sandstone villa on Mills Terrace, North Adelaide, which attracted almost 18,000 views in the leadup to its Dec. 20 auction through Williams Luxury.

sandstone villa

Six registered bidders took part in the auction of 52 Mills Terrace, North Adelaide, which sold for $3.3million on December 20.

Williams Luxury

The grand and imposing four-bedroom home occupying a 1200 square metre landscaped block on one of North Adelaide’s most prestigious streets sold at auction for $3.3million and attracted six registered local and interstate-based bidders.

“North Adelaide generally has a very low level of luxury homes available to the market and the most prestigious properties can be tightly held by the same family for generations,” Ms Williams said.

“The market conditions at the end of 2020 were very unusual for the area with several luxury homes coming onto the market around the same time,” she said. “All of these properties have now sold and we are back to experiencing traditional very low levels of new properties coming onto the market.“

CoreLogic figures for North Adelaide show the suburb’s median house price first broke the $1 million barrier in October 2020, while SQM Research listing data highlights the shortage of property available for sale, with 28 houses available in January, the lowest since June 2020.

Mr Fox remains confident about Adelaide’s outlook, particularly given its reputation as a “safe haven” when it comes to health and the economy, two contributing factors that had lured many expats back from overseas as well as new residents from interstate.

“Our inner-city, hills, regional and beachside locations have seen significant growth and are always sought-after, but we have seen demand and growth pretty much across the board,” he said.

“The prestige market is extremely strong and it’s probably the most opportune time to sell in years. Stock levels are relatively low and it’s not unusual to receive a dozen or so offers on a prestige property, and we can’t see it slowing down this year,” he added.



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Ray White’s chief economist outlines her predictions for housing market trends in 2024

By Bronwyn Allen
Tue, Nov 28, 2023 2 min

Ray White’s chief economist, Nerida Conisbee says property price growth will continue next year and mortgage holders will need to “survive until 2025” amid expectations of higher interest rates for longer.

Ms Conisbee said strong population growth and a housing supply shortage combatted the impact of rising interest rates in 2023, leading to unusually strong price growth during a rate hiking cycle. The latest CoreLogic data shows home values have increased by more than 10 percent in the year to date in Sydney, Brisbane and Perth. Among the regional markets, price growth has been strongest in regional South Australia with 8.6 percent growth and regional Queensland at 6.9 percent growth.

“As interest rates head close to peak, it is expected that price growth will continue. At this point, housing supply remains extremely low and many people that would be new home buyers are being pushed into the established market,” Ms Conisbee said. “Big jumps in rents are pushing more first home buyers into the market and population growth is continuing to be strong.”

Ms Conisbee said interest rates will be higher for longer due to sticky inflation. “… we are unlikely to see a rate cut until late 2024 or early 2025. This means mortgage holders need to survive until 2025, paying far more on their home loans than they did two years ago.”

Buyers in coastal areas currently have a window of opportunity to take advantage of softer prices, Ms Conisbee said. “Look out for beach house bargains over summer but you need to move quick. In many beachside holiday destinations, we saw a sharp rise in properties for sale and a corresponding fall in prices. This was driven by many pandemic driven holiday home purchases coming back on to the market.”

3 key housing market trends for 2024

Here are three of Ms Conisbee’s predictions for the key housing market trends of 2024.

Luxury apartment market to soar

Ms Conisbee said the types of apartments being built have changed dramatically amid more people choosing to live in apartments longer-term and Australia’s ageing population downsizing. “Demand is increasing for much larger, higher quality, more expensive developments. This has resulted in the most expensive apartments in Australia seeing price increases more than double those of an average priced apartment. This year, fewer apartments being built, growing population and a desire to live in some of Australia’s most sought-after inner urban areas will lead to a boom in luxury apartment demand.”

Homes to become even greener

The rising costs of energy and the health impacts of heat are two new factors driving interest in green homes, Ms Conisbee said. “Having a greener home utilising solar and batteries makes it cheaper to run air conditioning, heaters and pool pumps. We are heading into a particularly hot summer and having homes that are difficult to cool down makes them far more dangerous for the elderly and very young.”

More people living alone

For some time now, long-term social changes such as delayed marriage and an ageing population have led to more people living alone. However, Ms Conisbee points out that the pandemic also showed that many people prefer to live alone for lifestyle reasons. “Shorter term, the pandemic has shown that given the chance, many people prefer to live alone with a record increase in single-person households during the time. This trend may influence housing preferences, with a potential rise in demand for smaller dwellings and properties catering to individuals rather than traditional family units.”

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