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GREATER Adelaide’s median land prices have surpassed $200,000 for the first time after growing by more than 5% to the June quarter.

According to real estate services group Oliver Hume, land prices were up by 8.5% in the year to the end of June 2022, hitting a median of $205,000 and a median value rate of $465/sqm.

“Together with South East Queensland, the Adelaide market is one of the healthiest in the country with relatively good affordability and a healthy supply of stock coming to market,” said Julian Coppini, CEO of project marketing at Oliver Hume.

Sales volumes over May and June remained above long term averages, despite a dip following interest rate hikes, as almost 1,000 homesites were transacted in the quarter, up on the previous three months’ 800 sales.

Greater Adelaide’s key greenfield all saw recorded growth in the year to the end of the quarter, with the Barossa up 4.9%, Gawler up 18.3%, Mt Barker 15.1% and Playford 10.9%.

“While prices have increased in the recent cycle and are around peak levels, affordability will continue to be the dominant factor in the attractiveness of the Adelaide market, with land considerably more affordable than many other markets around the country,” added Coppini.

At the same time, the median size of lots selling across the market has been dropping over the last two years, with the median lot size at the end of the quarter coming in at 450sqm, as price growth resulting in a shift in buyer budgets and preferences.

“Like all markets, we’ll see a slowing of sales volumes as buyers reassess their borrowing capacity and other considerations, but over the medium and long term, we should see steady growth underpinned by a strengthening economy and a return to steady population growth,” said George Bougias, head of national research at Oliver Hume.

Oliver Hume itself has expanded its presence in South Australia over the last 12 months, looking to take advantage of growth opportunities in the state, having launched more than $350 million in projects on behalf of clients.

“The Adelaide economy is bouncing back strongly from COVID with unemployment falling on the back of steady jobs growth,” concluded Bougias.