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What Factors Are Driving Strong Demand For Land In South Australia?
The South Australian land market begun 2022 on the front foot as sales volumes, prices and overall demand continued to show strength.
Increased activity is underpinned by the increasingly positive sentiment toward South Australia and, in particular, Adelaide.
Oliver Hume continues to track a diverse range of key land market indicators in the state including sale volumes, prices, sizes and selling times.
Robust sales volumes and higher prices were hallmarks of the South Australian land market in 2021 as many different buyers looked to seize opportunities.
But what factors are driving this demand?
Here are three key factors of the South Australian land market that are driving increased interest amongst owner occupiers and investors from both South Australia and across the rest of Australia.
Median land prices for Greater Adelaide finished the December quarter of 2021 at $189,000 having edged higher over the year.
Relatively affordable land prices reflect the relative affordability of the broader Adelaide residential property market.
In terms of house prices, the Adelaide median is less than half that of Sydney and less than two thirds of Melbourne.
This relative affordability is one of the key reasons local and interstate buyers have been increasingly active.
We continue to see many interstate buyers, especially from across the eastern seaboard and larger capital cities, where house prices have increased significantly in recent years, looking for opportunities in Adelaide.
In addition, many South Australian expatriates returned to the state recently due to COVID-19.
While affordability attracts first home buyers and investors, existing owner occupiers are also driven by the value proposition and relative pricing between markets.
Many owner occupiers, for example, are looking to either upgrade or downgrade and need to make their purchase dollars go further.
As a result, due to Adelaide’ exceptional affordability, we are seeing a range of buyers active in the market across a diverse range of household, family, income and occupational groups.
Adelaide was once again featured on the global stage recently when the city was ranked Australia’s most liveable city and the third most liveable city in the world (Economist Intelligence Unit’s Global Liveability Index 2021).
The ranking highlighted Adelaide’s reputation as a safe and sustainable city with healthcare, education and infrastructure being just some of the key drivers of Adelaide’s success.
Adelaide is famous for its diverse communities and boasts one of the best food and drink scene in the country.
The city is surrounded by naturally stunning landscapes and is home to some of the premier wine regions in the country.
More and more people are realising the charms of Adelaide and seeing themselves living, working and raising a family in the city.
The increasingly dynamic South Australian economy is positioning the state’s property market for a strong future.
Adelaide has several thriving local industries and thousands of businesses which offer a range of employment opportunities for a growing number of workers.
Adelaide is a national leader in some industries.
For example, the South Australian defence industry accounts for a sizeable share of employment and output in the state.
Seven of the world’s top ten defence companies and a quarter of Australia’s specialist defence firms are in South Australia.
New infrastructure, new manufacturing projects and other new economic initiatives are putting Adelaide and the broader state on the map and generating interest amongst many buyers.
Many infrastructure and manufacturing projects are of national significance and are each expected to generate thousands of jobs.
Many of these roles will be high-skilled offering above average employment.
Sustainable, long-term employment in a diverse range of industries is a key driver of property demand.
Infrastructure investment remains high and is expected to continue.
The latest State Budget includes several key infrastructure announcements which are part of $17.9 billion worth of projects currently being delivered across South Australia.
Upgraded and new infrastructure will reshape the urban geography and connectivity of Adelaide while also better connecting Adelaide and regional South Australia.
For example, Adelaide’s North–South Corridor continues to be upgraded and will help to realise the vision of linking southern and northern Adelaide.
Continuing strong property demand, including a buoyant land market, are expected in 2022 as Adelaide continues to live up to its new status as Australia’s most liveable city.
The reopening of international and interstate borders will help to underpin the local market as it transitions to its next phase.
The last few years has seen Adelaide emerge centre-stage and, now more than ever, people are realising the city’s potential and what it has to offer.
Affordability, liveability and an increasingly dynamic South Australian economy are just some of the many factors underpinning the robust performance of the property market, including the greenfield land sector, and there’s increasing confidence that the strong results are set to continue.