SA landlords exit state in massive numbers as rental crisis worsens

More than 7000 rental properties have been sold off over the past year, in a further blow to already struggling tenants. Now, data has revealed which areas are most impacted. See the list.

Thousands of landlords have listed rental properties for sale in South Australia over the past year in a further blow to already struggling tenants, new data shows.

Research by SuburbTrends has revealed the hotspots where the most investors are selling up and where renters might soon be facing eviction – if they haven’t already been ordered out. Postcode data crunched by the real estate analytics company shows 7077 ex-rentals have been offloaded in the 12 months to June – equating to 12 per cent of all properties sold.

Across the metro region, North Adelaide was home to the highest share of investment property sales, with 73 homes previously available to tenants among the 200 total sales, or about 37 per cent.

Gulfview Heights, Para Hills and Para Hills West – all located within postcode locality 5095 – experienced the next greatest share of ex-rental sales at 32 per cent, with as much as 173 of its former rentals sold and potentially no longer available to tenants.

Postcode 5063, which includes Glenunga and Glenside, was next at 30 per cent, followed by Marleston, Richmond and Cowandilla (postcode 5034), where 103 ex-rentals have sold, accounting for 29 per cent of total sales.

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Rounding out the top 10 localities were postcodes 5083 (Walkerville), 5031 (Keswick), 5007 (Brompton, Ridleyton and Ovingham), 5067 (Maylands), 5035 (Ashford) and 5081 (Collinswood), all experiencing ex-rental sales of over 20 per cent.

In Regional SA, Roxby Downs, Coober Pedy and Whyalla ranked high with over 30 per cent of ex-rentals sold.

SuburbTrends analyst Kent Lardner said the landlord exodus meant the loss of critical rental stock at a time when more housing was urgently needed.

“The significant number of ex-rental properties not being replenished suggests that the rental market in these areas will face increased pressure,” he said.

“This could lead to higher rental prices and reduced availability of rental properties, exacerbating the rental crisis in these postcodes.

“Tenants in these regions may struggle to find rental accommodation due to the decreased supply.

“The reduction in available rentals could also increase competition and make it harder for lower-income tenants to secure housing.”

Mr Lardner said it was clear that the current structure of the housing market was failing and governments needed to change course.

“We had the solution 40 to 50 years ago, which was social housing, but we turned our back on it. We have to accept that the private landlord market has delivered us unaffordable housing. A very large proportion of society simply cannot afford homes.”

Latest property data shows property prices have jumped by 13.8 per cent over the past year to $751,000 for houses and 13.1 per cent for units, to $501,000, across metro Adelaide.

Meanwhile, the average rent for a house now sits at $580 a week.

That’s $60 more than what tenants would have paid a year ago, $130 more than two years ago and $170 more than the average recorded in 2021.

Unit tenants are now also paying, on average, $140 a week more than they did three years ago, with rent jumping from $350 a week to $490.

Peggie Sim, of Harcourts Prohomes, who is selling a tenanted rental at 8/118 Brougham Place, North Adelaide, said soaring mortgage costs and interest rates were the main driver of the increased investor sales in many markets.

Peggie Sim outside 8/118 Brougham Place, North Adelaide. The investment property is currently for sale and is one of more than 100 ex-rentals to have hit the market in North Adelaide over the past years. Picture: Dean Martin

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“People predict that interest rates will go higher again, so some (investors) may choose to release investment properties as they can’t sustain cost or revise rent to recoup cost (due to recent rental reforms),” she said.

“We have more and more investors telling us that they are looking to go ... the way it’s happening in larger numbers in other states. But here in Adelaide, we’re still catching up to that trend as we have limited supply of rentals, so people are still hanging on.

“But we will see it happening in larger numbers. We’ll see more investors selling, so when it happens, we need buyers who are happy to keep tenants in their homes ... as would be nice to see with Brougham (place) which already has multiple offers from a mix-range of buyers.”

Property consultant and auctioneer Hamish Mill of Williams Real Estate said while some investors were leaving the market, others still saw plenty of potential.

”Even though property prices have gone up exponentially, Adelaide is still relatively affordable compared to the eastern seaboard,” he said.

“With the market experiencing short rental supply, investors know they can get a back for their buck ... and that bricks and mortar is still the safest way to invest.

“So at the moment, we still very much see a mixed bag of buyers but, of course, we always need more investors to enter the market as everyone needs a roof over their heads.”