Adelaide’s property market has seen more growth than other Australian capital cities in recent years. This makes it an exciting market to be in for investors. But why is the market so different here compared to other cities, and how does this affect local property values and investors?
Professional real estate valuers in Adelaide research and analyse a wide variety of factors when they determine the market value of a property. The market itself is a significant consideration and requires careful analysis to leverage for your benefit.
What influences the market?
The property market, no matter the city, is influenced by a great variety of factors. These influences can be both local and global. Here are five major influencing forces on the property market.
Economy
The overall economy has more influence on local property markets than you might expect. Worldwide, Australian state and local economies all impact the condition of the market.
The economy itself is influenced by the following:
- Employment rates
- Wages
- Consumer spending.
These three elements contribute to buying power and the overall behaviour of consumers. It can also affect what they can and can’t afford when buying a home or any other kind of property.
Interest rates
Interest rates rise and fall just as housing prices do, but they do not always rise and fall at the same rate. Prices can be high with low interest rates, low with high interest rates, or reasonably match interest rates. Buyers would, of course, prefer properties to be priced affordably with low-interest rates, however, in recent years, this has become an increasingly unrealistic hope.
With rising rates, many buyers may rush to purchase a property in fear of the rates reaching astronomically high levels. Others might wait for a more affordable rate. As interest rates dictate buyer behaviour, they too affect real estate prices and market value.
Supply and demand
At present, the number of available properties is dismal. As in many parts of Australia, vacancy rates are low in Adelaide. Demand, however, is high. This means more buyers are on the market than properties are available, thus increasing property values further.
Some of this demand is local, but with Adelaide property prices being more affordable than those found in other states, interstate buyers have entered the local market ready to make a move to South Australia.
Demographics
The demographics of buyers affect the type of properties they are looking for. A single person would likely look for a smaller home like a flat. Likely, they would favour options found closer to amenities such as gyms, entertainment, cafés, and restaurants. New couples or immigrant families would likely aim to buy a modest home in an affordable suburb with room to grow.
Demographics, therefore, dictate demand for particular property types in certain areas.
Location
You may have noticed that property values can vary from city to city. The reason is that no location is exactly the same as another. Some areas see rising populations, which increases demand and raises prices. Other local factors can also influence the market, including such things as:
- Developing infrastructure
- Local employment rates
- Crime rates
- Available amenities
- Condition and style of streets and community hubs.
Location, combined with demographics, can influence supply and demand, significantly contributing to property values.
Learning more about the market
To gain more insight into the local market before buying or investing in real estate, you can look into a property professional's valuation and advisory services. Real estate valuers offer services that allow buyers to analyse a property before they commit to a sale. Their report summarises the local market and how it influences the value of that specific property and its comparables in the area.
For more information, don’t hesitate to get in touch with your local property valuation firm.