A landmark, joint study by Aussie Home Loans and CoreLogic has revealed Adelaide house values have risen at an annualised rate of 5.9 per cent or $14,000 since 1993.
At the same rate of growth over the next 25 years, Adelaide’s median house value could rise from today’s $462,000 to reach $1,917,000 in 2043.
The Aussie/CoreLogic ’25 years of housing trends’ report found annualised value gains in Adelaide apartments have been 5.2 per cent or $9,500, with the median value now $328,300. In 25 years, the median unit value in Adelaide could be $1,175,000.
Chief Executive Officer of Aussie, Mr James Symond, said “Our report reveals that residential property in Adelaide has shown consistently strong growth over the last 25 years, across five property cycles.”
The percentage of annual household income in Adelaide required to service a loan – at an 80 per cent loan to value ratio – has risen from 22.7 per cent to 34.2 per cent since 2001.
Mr Symond said “With average mortgage rates currently close to their record low levels of the 1960’s, loan serviceability levels have actually improved over recent years, despite home prices rising.
“However housing affordability remains an issue for people in Adelaide, largely driven by recent growth in both house and apartment prices. Buyers now need to dedicate 128 per cent of their annual gross household income to raise a 20 per cent deposit, with property worth 6.4 times annual household incomes; up from 3.6 in 2001,” he added.
The report expects cities across Australia to gain density as the population grows and urban planning strategies maximise the use of strategically located land and transport corridors.
The report also revealed the top 20 suburbs in Adelaide for growth in house values over the last 25 years, with Andrews Farm the star performer.
Andrews Farm has experienced extraordinary growth in its median house value from $24,200 to $266,000 since 1993, followed by Kurralta Park which has lifted its median unit value from $57,000 to $415,000.
Mr Symond said “It’s not a big surprise that attractive suburbs with strong demand from buyers dominate the top 20 suburbs in Adelaide. Detached houses have been the primary drivers of the market, with the Top 20 listing featuring apartment price growth in only four suburbs.
“If the changing face of residential property and staggering growth of technology we’ve seen over the last 25 years continues, it’s likely the next 25 will produce even greater change,” concluded Mr Symond.
To view the full Aussie/CoreLogic 25 years of housing trends report, visit www.aussie.com.au/25years or contact an Aussie Broker for a free copy.