Adelaide – can the momentum continue ?
What is it about Adelaide that ’ s continuing to drive particularly strong price growth ? Sydney and Melbourne have both seen falls since the start of the year , elsewhere price growth has slowed . In Adelaide , the median house price is at its highest level ever recorded . Growth over the past 12 months was faster than the previous 12 months .
The strength in this city isn ’ t just evident in price growth . Adelaide is topping the list for auctions . An analysis of average active bidders at Ray White auctions shows that Adelaide auctions are the hottest in Australia . Where Sydney , our quietest market , is seeing on average 2.2 bidders per auction , Adelaide is seeing three bidders per auction .
Rental growth is also strong , suggesting an underlying demand for housing that isn ’ t purely finance driven . Average weekly advertised rents for houses are up 11.1 per cent while unit rents are up 9.3 per cent . And unlike house price growth , it ’ s unlikely to slow much this year . International borders are open again which means greater population growth . On the supply side , we have a construction industry in turmoil which will limit the development of new houses .
While Adelaide hasn ’ t yet slowed down like the rest of Australia , it ’ s likely that growth over the rest of the year will be more subdued . Interest rate rises will limit borrowing capacity and are having an impact on sentiment towards property . The fundamentals of property demand remain strong but finance is becoming expensive .
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