Adelaide’s median house price cracks the $500,000 barrier – now see what would happen to property prices if history repeats

Adelaide’s median house price has cracked a major milestone – explore the table to see how much your house is worth now and what it could be worth in the years ahead.

The strength of the state’s real estate market and resilience post-COVID is obvious, as Adelaide houses record strong growth and the metropolitan house median eclipses $500,000 for the first time.

According to the Valuer-General’s latest report for the December quarter, Adelaide’s median house price has grown 3.61 per cent for the quarter, and 5.15 per cent over the past 12 months, to a record median of $510,000.

Metro Adelaide units, despite dropping 6.89 per cent in value for the quarter, are up 7.54 per cent for the year, to a median price of $381,750.

Ouwens Casserly Real Estate director Nathan Casserly said to have finally cracked $500,000 was a significant milestone and reflected the widespread confidence in the SA property market.

“Buyer activity is as high as we’ve seen it in well over a decade,” Mr Casserly said.

“We’re seeing huge response from interstate buyers returning to Adelaide, new interstate buyers coming here for the first time and a lot of expats returning from overseas having seen how safe it is here. It’s very positive and I think it will continue for a fair while yet.”

Of suburbs that recorded at least 10 sales for both the December quarter, and the same quarter last year, Adelaide’s southern suburbs had the brightest stars.

Sellicks Beach recorded the greatest increase, rising 53.7 per cent to a $488,000 median. Port Noarlunga South homes have risen 34.64 per cent from $396,250 to $533,500, while nearby Port Willunga has increased 33.33 per cent from $390,000 to $520,000.

Northern stars Munno Para and Gawler South claimed fourth and fifth place, rising 30.43 per cent to $300,000 and 27.69 per cent to $415,000 respectively.

“We’re starting to see, for the first time in at least 12, maybe 24 months, investors starting to return to the SA market,” Mr Casserly said.

Looking at Adelaide’s local government areas, houses in the Adelaide City Council area recorded the highest quarterly growth, with house values up 25.5 per cent to $1.255 million.

Holdfast Bay fared the best over the past 12 months – up 15.29 per cent to a median of $905,000. This is also up 12.07 per cent on the previous quarter.

Home values in the Walkerville Council area suffered the greatest value loss, with values down 16.75 per cent for both the quarter and year.

Regionally, Port Lincoln performed strongly, with home values up 15.84 per cent for the quarter, and 17.24 per cent for the year, to a median of $340,000.

Barmera recorded an increase of 23.9 per cent for the quarter, while Renmark homes are up 45 per cent on this time last year.

Ray White managing director Dan White said low interest rates, government subsidies and the confidence Australians had in property were keeping markets around the country buoyant.

“Buyer demand has never been so strong and all the indicators point to continued growth,” Mr White said.

“While 2021 is bound to be bumpy, we are well placed to handle any scenario thrown at us. There are grounds to believe the global economy can embark on a very robust recovery this year.”

There were also more house sales overall – 6776 this quarter compared to 5565 last quarter and 5817 for 2019’s final quarter.

Real Estate Institute of South Australia chief executive officer Barry Money said the uptick in sales was positive and a vote of confidence in the SA market.

“It’s fantastic to see that the volume of sales has significantly increased this quarter for metro Adelaide, a massive increase of 16.28 per cent from the previous quarter and 8.58 per cent from the same quarter last year,” he said.

Daniel and Sarah Talbot with their children Oliver, Harvey and Vivienne have recently bought a home in Glenelg North, the suburb with the state's strongest growth over the past five years. Picture: Emma Brasier

A HISTORY OF GROWTH – BUT WILL IT CONTINUE?

They say past behaviour is the best indicator of future behaviour. If that is also true for value growth, SA homeowners have plenty of reasons to smile.

The Advertiser has analysed the value growth for SA’s suburbs to have recorded 10 or more sales for the final quarters in 2015 and 2020 to predict what might happen by 2025. Explore the interactive table near the top of this story to see the figures for your suburb.

According to the Valuer-General’s latest report, and applying suburb growths since 2015, homes in Glenelg North had shown the greatest increase in median price. In 2015, its median was $610,500. By 2020 that had risen to $1.005m – an increase of 65 per cent.

Assuming that growth continued over the next five years, Glenelg North’s median would hit more than $1.654m by 2025.

That figure was music to the ears of Sarah Talbot, who had recently bought in the suburb.

“This is our forever home – we were in Glenelg East in a much smaller property but now we’ve got a nice big block here and we were able to stay in the same area,” she said.

“It’s a good area to buy in because you can be confident your capital value is going to go up. It’s good to know that when we are looking to downsize in the future we’ll have a nice little pot of money to retire on, hopefully.”

Sellicks Beach and Norwood were also tipped for solid growth over the next five years.

Sellicks Beach’s current $488,000 median was set to rise 55 per cent to a possible $756,013, and Norwood up 49 per cent from its current $1.19m to a potential $1.775m.

Belle Property Glenelg agent Rhys Digance said no suburb was guaranteed to follow the pattern of growth seen throughout history, but there were key identifiers buyers could look for to identify suburbs with a good chance of capital appreciation.

“Proximity to amenities is important, whether that be the city, the coast, cafes, public transport and quality schools,” he said.

“Also look for areas with constant development – old houses going and new houses coming.

“If you're seeing that trend in a suburb, you can be fairly confident the prices are going to be on the way up.”