Adelaide’s ever-rising median house price is paying dividends for property sellers across the state, but one area has them smiling harder than anywhere else.
New PropTrack data reveals home sellers in Adelaide’s southern suburbs have been fetching the largest average profit – the difference between it sale price and the time it previously sold – in the state.
According to the data, 99.6 per cent of all sales in Adelaide’s south over the past 12 months have sold at a profit, with the average windfall being $482,500.
It was closely followed by Adelaide’s central and hills area where the average profit was $460,000.
Here 99.4 per cent of sales sold for a profit.
Aerial view of Adelaide CBD. Picture: Supplied by Knight Frank
Adelaide’s western suburbs wasn’t far behind with an average profit of $430,000, while Adelaide’s northern suburbs sold for an average profit of $415,000.
This area recorded the highest portion of profit-making sales at 99.7 per cent, while average profits in the south east, mid north and outback were $305,000, $274,000 and $140,000 respectively.
In comparison, the average profit experienced across metropolitan Adelaide was $400,000, with 99.2 per cent of homes selling for more than they were last purchased.
REA Group Senior Economic Analyst Megan Lieu said, while households faced increased financial pressures, it had been a good year for many home sellers
“Analysis of properties resold with multiple prior sales, shows that homeowners have made exceptionally large capital gains in the past year,” she said.
“While higher interest rates are likely to soften demand from buyers across the country, the effect on supply is unlikely to be as pronounced due to these strong equity gains.
“Almost all property owners with a loan are currently in positive equity, meaning they have a buffer against an increase in mortgage repayments.
REA Group senior economist Megan Lieu. Supplied
“This allows them to take actions such as lowering their expenses, refinancing their loans or depending more on their savings to offset these rising servicing costs.
“With a large proportion of owners in this position, the number of forced sales is likely to be low.”
She said increase rates would temper future growth.
“Though price growth is expected to slow further and decline in some regions as a result of demand, these equity buffers will limit cases of distressed selling and support the gradual easing in prices, reducing the likelihood of abrupt and destabilising price falls.”
Edge Realty principal Mike Lao, who sells in Adelaide’s north which recorded the highest percentage of profit-making sales – said the area had seen huge price gains in recent years.
“It has been undervalued for so long, and I think people have only in recent years started to appreciate the value out here and the fantastic community,” he said.
Mike Lao, Director/Sales, Edge Realty.
Mr Lao said the cost-of-living crisis had fuelled demand for more affordable homes, and that Covid-19 had attracted investor interest, particularly from interstate.
He said he expected values to continue to climb in the area, especially with first-home buyers now having more available cash thanks to recent government changes, and the continual investment in infrastructure such as shops, schools and green space.
“There’s nothing to suggest it will slow down, and there’s more land being released, so I’d expect that demand to continue and prices to keep going up accordingly,” Mr Lao said.
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