They’ve been the value growth darlings of the state’s property market ever since the pandemic, but now a new report is warning buyers against purchasing in one popular region.
Research group Suburb Data’s latest release issues a warning to househunters looking at buying in Adelaide’s northern suburbs, suggesting prices may be peaking in this area, and buyers are at risk of overpaying.
Elizabeth South houses, with a current median value of $477,225, were named the state’s riskiest properties to buy, ahead of houses in Elizabeth Park, Gawler South, Munno Para, Elizabeth Downs and Elizabeth East.
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Rosewater, Glandore, Seacombe Heights and Elizabeth Grove houses rounded out the top 10.
Research group Suburb Data examined every suburb in the country by the ratio of property demand to supply.
This was determined using a range of metrics such as online engagement on listings, the average time it takes homes to sell, auction clearance rates and listing volumes, among others.
These figures were contrasted with the recent trajectory of price growth.
Markets where price growth was beginning to slow after a long march upwards, coupled with falling demand and rising supply, were considered to be peaking.
Suburb Data analyst Jeremy Sheppard said home seekers who purchased homes in peaking markets would be taking a gamble.
“No market can outperform forever,” Mr Sheppard said.
“(Suburbs) can reach a point where buyers aren’t prepared to pay the prices anymore because they have cheaper comparable options somewhere else.
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Jeremy Sheppard of Suburb Trends. Supplied
“When that happens, prices don’t just level out. Sometimes they can retract and then hit a new bottom for many years.
“Eventually they will become good value again, buyer demand will return and prices will start to grow once more, but it can take a long time until values return to that peak.”
Mr Sheppard said every suburb moved in cycles characterised by periods of growth, peaks, falls, troughs and eventual return to growth once prices became value again for new buyers.
He said it was “an old school buyer’s agent myth” that some city suburbs always outperformed the rest of the market and even popular suburbs could see price falls at some stage.
But it wasn’t just Adelaide’s affordable suburbs Mr Sheppard flagged as places to be wary of buying in, with Parkside, Fullarton, Osborne and Queenstown properties also being singled out.
Edge Realty director Mike Lao, who sells in the northern suburbs, said buyers needed to put reports in context and consider the bigger picture when making purchasing decisions, with significant infrastructure investment in the area, and its position in the government’s growth corridor set to have an influx of housing in the coming years all likely to lift prices even higher.
Mike Lao, Edge Realty director.
“There’s no indication from anything that I can see that prices are looking like plateauing or going backwards in this area, so I think buyers should take reports like this with a pinch of salt,” he said.
“It’s still far more affordable than anywhere closer to the city, where it’s hard to find homes these days, so the demand for homes here hasn’t abated at all and that demand is keeping prices up.
“Property ownership is traditionally a long-term process, so you would expect to see gains in due time, even if you did happen to buy at the top of a property cycle.
“There’s a saying in real estate investment: ‘Don’t wait to buy – buy and wait’.”
