For most buyers real estate is a long-term investment, and now new data reveals where homeowners who are in it for the long haul look set to reap the greatest reward.
According to new REA Group data, the top three suburbs for value growth over the past three decades were all found in Adelaide’s north.
In Elizabeth South homes have increased by 11.7 times their original value to a current median of $583,000.
Davoren Park homes were nipping at their heels, with their value increasing 11.4 times their original value to a $532,000 median.
Smithfield Plains’ median home value has increased by 11.3 times over three decades, with Henley Beach South in Adelaide’s western suburbs and both Elizabeth Vale and Elizabeth Grove homes increasing by 11.2 and 11.1 respectively.
Mike Lao, Edge Realty.
Edge Realty principal Mike Lao, who sells in Adelaide’s northern suburbs, said he wasn’t surprised to hear they were leading the charge.
“It has been undervalued for so long and I think people have only in recent years started to appreciate the value out there and the fantastic community developing out here,” he said.
He said the cost of living crisis has fuelled demand in more affordable homes, and that Covid had put the area under the eyeballs of investors, particularly those from interstate.
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He said he expected home 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 like shops, schools and green spaces.
“There’s nothing to suggest it will slow down, and there’s still more land being released, so I’d expect that demand to continue and prices to keep going up accordingly.”
The Mung family outside their Elizabeth South home. Picture: Emma Brasier
Mang Mung, 47, has called Elizabeth South home since 2017 and said he was attracted by its affordability and large backyard – something that reminded him of his home country of Burma, now Myanmar.
“It’s also got good public transport and there’s a great community here,” he said.
“I’ve checked out house prices around here on the internet from time to time and I’ve been surprised by some of the amazing prices people are getting.”
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REA Group economist Angus Moore said the forces driving price rises over the past 30 years were complex, but could be broadly categorised by changes in supply and demand.
He explained that the country was building far fewer homes relative to population growth than in the past and this was creating supply shortages across major city markets.
This change had coincided with a “structural” downward shift in interest rates over the period, which meant buyers had access to more debt and could spend more on housing.
REA Group economist Angus Moore
“It’s hard to forecast 30 years ahead, but it’s less likely we will have this same level of growth again,” Mr Moore said.
“Many of the people living in areas where prices have risen significantly are sitting on substantial equity.
“That may not help much if they are staying put, but if they are downsizing or moving on and are in position to unlock that equity, they have a substantial amount of wealth.”
– with Aidan Devine
English (US) · 