2023-07-18-莱坊-Adelaide_Residential_Insight_Q2_2023_4页_784kb

Adelaide Residential Market Summary (Q2 2023)

Core Content Overview

This report provides an analysis of the residential real estate market in Greater Adelaide, including sales, price performance, rental trends, economic indicators, and the lending environment. It highlights the market's resilience despite broader economic challenges and offers a forecast for future growth.

Main Market Trends

Sales & Price Performance

• Residential Sales Volume:
  • Down 1% in the March 2023 quarter to 6,249 homes.
  • Annual sales volume was 11% lower than the previous year.
• Days on Market:
  • Average days on market for residential homes remained at 70 days in the March 2023 quarter, consistent with the previous quarter.
• Price Growth:
  • Median residential value rose to $702,500 by March 2023, up 6.0% over the year.
  • Established Houses:
    • Median house value reached $795,500, up 5.6% annually.
    • Annual price growth was 5.6%.
  • Apartments:
    • Median apartment value was $418,000, up 9.0% over the year.
    • Annual price growth was 9.0%.

Rental Market

• Vacancy Rate:
  • Total residential rental vacancy stood at 0.5% in March 2023, consistent with the previous quarter and slightly higher than the same period last year.
• Rental Growth:
  • Rents for residential properties rose 4.2% in the quarter and 12.5% over the past year, reaching a weekly median rent of $495.
  • Houses:
    • Weekly median rent reached $520, up 13.0% annually.
    • Gross rental yields increased by 3 bps to 4.14%.
  • Apartments:
    • Weekly median rent reached $420, up 13.5% annually.
    • Gross rental yields increased by 2 bps to 5.31%.

Future Pipeline

• Building Approvals:
  • House approvals decreased by 19.2% in the March 2023 quarter.
  • Apartment approvals dropped by 35.7% compared to the previous quarter.
  • This indicates a potential slowdown in new housing supply, which could support price growth in the long term.

Population & Economic Outlook

• Population Growth:
  • Greater Adelaide's population was estimated at 1.4 million in 2022, with an annual increase of 2.9%.
  • Projected population growth to 2041 is 0.8% per annum.
• Economic Growth:
  • South Australia's economic growth was 4.4% in 2022, but is expected to slow to 0.3% in 2023.
  • Forecast for 2024 and 2025 shows a gradual recovery, with an average growth rate of 1.2% from 2023 to 2025.
• Unemployment Rate:
  • Unemployment in Greater Adelaide was 3.7% as of March 2023, up by 29 bps from the previous quarter.

Lending Environment

• New Household Loan Commitments:
  • Declined by 5.4% in the March 2023 quarter, slightly better than the -9.7% drop in the previous quarter.
• First Home Buyer Loans:
  • Increased by 42.0% in March 2023, compared to 15.3% in the same period last year.
  • First home buyers represented 16.2% of all owner occupier loans in March 2023.
• Interest Rates:
  • The official cash rate was raised to 4.10% by the Reserve Bank of Australia (RBA) as of June 6, 2023.
  • Oxford Economics forecasts a reduction to an average target of 3.94% by the end of 2024.
  • Mortgage Rates:
    • Owner occupier 3-year fixed rate increased by 3 bps to 6.27%.
    • Standard variable rate rose by 50 bps to 8.02%.
    • Investor 3-year fixed rate decreased by 1 bps to 6.32%.
    • Investor standard variable rate rose by 50 bps to 8.60%.

Market Forecast

• Economic Growth:
  • Forecasted to trend from 4.4% (2021) to 0.3% (2023), then gradually increasing to 2.6% (2025).
• Unemployment Rate:
  • Expected to rise slightly to 4.1% by 2025.
• Cash Rate Target:
  • Projected to decrease from 3.8% (2023) to 2.9% (2025), with an average of 3.6% over the period.
• Price Performance:
  • Expected to slow from 22% (2021) to 2% (2023), then stabilize at 3% to 4% annually from 2024 to 2025.
• Rental Market Growth:
  • Projected to increase from 9% (2021) to 17% (2023), then moderate to 11% to 8% over the next few years.
  • Average annual rental growth is forecasted at 12% from 2023 to 2025.

Key Insights

• Greater Adelaide maintains the lowest residential vacancy rate among Australian capital cities, contributing to double-digit rental growth.
• Despite a slight decline in sales volume, the market remains strong and resilient, with consistent price growth and high auction clearance rates.
• Established houses continue to show strong demand and price performance, with a median value of $795,500.
• Apartment market is experiencing slower price growth but higher rental growth, suggesting potential for investment.
• Economic slowdown is expected in 2023, but gradual recovery is anticipated from 2024 onwards.
• Interest rate trends are expected to ease by the end of 2024, potentially boosting buyer activity.

Contact Information

• Residential Research: Michelle Ciesielski
  Email: michelle.ciesielski@au.knightfrank.com
  Phone: +612 9036 6659

• Residential Site Sales: Oliver Tontani
  Email: oliver.totani@au.knightfrank.com
  Phone: +618 8233 5210

• Franchise Partnerships: Sally Edvardsen
  Email: sally.edvardsen@au.knightfrank.com
  Phone: +612 9036 6845

• Residential: Erin van Tuil
  Email: erin.vantuil@au.knightfrank.com
  Phone: +612 9036 6699

• Residential Project Sales: Luke Hayes
  Email: luke.hayes@au.knightfrank.com
  Phone: +612 9036 700

• Valuations: Alistair Carpenter
  Email: al.carpenter@au.knightfrank.com
  Phone: +612 9036 62