More homes worth $1m
That’s the figure home buyers will face if the state’s property boom of the past 10 years is repeated this decade, according to real estate analysts.
The predicted rate of price growth – the highest in Australia after WA – would propel tens of thousands of houses into the seven-figure price bracket, with SA’s median price forecast to exceed $960,000.
It will also create more than 268 million-dollar suburbs and towns across the state – up from the current four, according to data provided to the Sunday Mail.
And of the top 10 locations based on the rate of price increase, four are located in regional SA.
By simply projecting forward the price rises recorded in suburbs and towns over the past decade, Australian Property Monitors has provided a crystal ball for South Australians to gaze into the potential real estate market in three, five and 10 years’ time.
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Since 1999 the median Adelaide house price has jumped from $148,300 to $427,260 in 2009, or 11.4 per cent a year, according to APM sales data.
If that rate of growth continues over the next decade, Adelaide median house prices will reach $1,231,000, according to APM calculations. The state’s most expensive suburb would be Unley Park, with houses typically worth $4.1 million.
Even the metropolitan suburb with the cheapest houses today, Elizabeth North, will more than quadruple from $180,000 to $589,000.
AMP economist Matthew Bell said several factors would drive real estate price rises.
“With SA’s increasing exposure to the resources industry, combined with the property demand driven by defence sector employment and the relative under performance in the last year or two, the longer-term outlook for prices is relatively good,” he said.
“The average long-term forecast of 11.4 per cent for the next 10 years is behind only that of WA.”
Leading real estate agent Anthony Toop said this projection could prove true.
“I definitely think it’s possible that the price increase of the past 10 years could be repeated,” he said.
“SA has a growing defence industry, an army battalion is being relocated to Adelaide and we are on the verge of a mining boom.
“The population is growing while a lack of supply of new housing will drive prices up.”
But such a price growth would provide a grim outlook for the next generation seeking home ownership, former valuer-general and current Independent MLC John Darley warned.
“This will continue to drive up prices in the future and from that point of view the APM price projections are probably justified,” he said. “Things are bad enough for first-home buyers and those on low incomes, but as prices rise so does the amount of stamp duty paid.”