SA rental market records its highest growth in more than a decade

Adelaide rental market returns are leaping ahead of the national growth rate. We’ve listed the suburbs where investors are getting the highest increase in yields.

South Australia’s rental market is delivering major returns for investors, outperforming the national average increase in yields, which has grown at its highest rate in more than a decade.

CoreLogic’s Rental Review for the June quarter showed rents in metropolitan Adelaide have increased 7.2 per cent in the past 12 months and 2.3 per cent over the past quarter.

The report showed Adelaide rental properties returned yield increases of 4.23 per cent on the previous quarter and 4.41 per cent on the same quarter last year.

Suburbs with the highest rental yields in Adelaide over the past year included Elizabeth North (7.4 per cent) and Elizabeth Downs (7.2 per cent).

The data shows investors with houses or units in 24 suburbs across Adelaide received average yields of six per cent or more over the past 12 months.

Nationally, there was a 6.6 per cent rise in rental prices for combined houses and units around the country over the past 12 months – the highest annual growth since January 2009.

Nationally, rent prices increased 2.1 per cent for the quarter and yields were up 3.41 per cent for the quarter and 3.73 per cent for the year.

Adelaide has the cheapest capital city weekly median rent at $430 per week.

Turner Real Estate chief executive officer Emma Slape said the growth was a market correction, and not something she expected to continue long-term.

Emma Slape says “I don’t think continuing rising rents are sustainable”. Picture: Brenton Edwards

“We’ve seen very little growth in rental prices for the past six to seven years, so there was a time when we would expect a natural market correction, and the number of people returning to SA from interstate and overseas because of our Covid situation has driven that demand over the past six to nine months in particular,” she said.

“I don’t think continuing rising rents are sustainable – I think it’s a market correction we’ve been waiting for a few years for, where landlords have had increasing costs and no rental growth.

“We are definitely seeing a lot less demand than we were even six months ago, and we’re getting around 40 per cent les inquiries on properties than we were six months ago.”

While Adelaide units underperformed for monthly, quarterly and year-to-date change, year-on-year growth of 4.5 per cent was more than three times the 1.3 per cent recorded nationally.

CoreLogic head of research Eliza Owen said increased government stimulus in Covid-19, the swift economic recovery and lack of supply had sharpened rental price increases, particularly in regional areas.