Adelaide lures expats with cheap, gorgeous real estate

It has taken the topsy turvy effects of COVID-19 to do it but after decades in a national blindspot, beautiful Adelaide is coming into its own as a desirable real estate market.

Agents in the Hills, by the beach, and in the “villages” precincts north and east of the CBD are reporting an uptick in inquiry from, according to Sam Oborn of Harcourts Adelaide Hills, Adelaide-born professionals who’ve been working along the east coast, “and who are now floating back”.

From the hard and not so hard lockdowns of Melbourne and Sydney, he says expats aged from 30-50, who have adapted to remote working, realise that for them Adelaide has more going for it than a Victorian or NSW regional centre, “and they want to get back to have a better lifestyle”.

If they’ve cashed in property in the expensive cities, they could be shipping in enough funding to afford something twice as big in accommodation and land size as what they’ve occupied in capitals with more than four times the population.

The latest data from the Domain House Price Report, released Thursday, showed Adelaide’s house and unit prices are both at record highs, despite any economic uncertainty that has prevailed in 2020.

House prices grew 2.8 per cent over the September quarter – the largest jump since late 2013 and the strongest September performance in eleven years.

House prices have risen for four consecutive quarters, pushing annual gains to 6.8 per cent, the steepest in a decade. Unit prices jumped 4.4 per cent over the September quarter, the steepest quarterly growth since mid-2013.

“Adelaide is an owner-occupied led housing market and is less exposed to the changes in demand as a result of international border closures,” said Domain senior research analyst Dr Nicola Powell. “Property values have remained incredibly resilient, given the economic impact of COVID-19.”

Adelaide is a very convivial 1.3 million people, which some town planners suggest as the perfect size for a stimulating city that functions well.

The first wave of returnees, says Oborn, “are looking at the higher priced properties from $700,000 to $2 million”. “And, in the Hills, that gets you a pretty amazing house!”

He says a Sydney couple who, sight unseen, just bought a five-bedroom, two living room brick home on 2000 square metres at Aldgate for $750,000. “They were keen to get out of Sydney and wanted a big garden”.

In the past six months, Oborn says, inquiries have increased by 20-30 per cent. “It’s been really noticeable”.

Nathan Casserly, director of the multi-office Ouwens Casserly group, confirms that while active interstate buying has been driven “by Adelaide expats with an appetite to return”, there has been a 30 per cent uplift in buyer inquiries from Sydney and Melbourne people less familiar with the town and who are opting to wait until they can inspect appealing property in real time.

When borders open to allow that, Casserly predicts “the influx of people wanting to come to Adelaide will lift future buying activity to historical levels. I can’t think of another time when we’ve seen that. Bring it on,” he says.

Having lived in Melbourne for the past 11 years, working in corporate partnerships with the Australian Sports Foundation, Darren Burton, 40, and his solicitor wife always had long-range plans to return to Adelaide, possibly when their children, aged five and three, entered secondary school.

But with the couple having successfully operated from home since March, and securing permission from their employers to continue doing so if they relocated to Adelaide, they’ve just sold their Melbourne home and are preparing to head west.

Burton says they had readied their Ascot Vale weatherboard for sale earlier in the year but were stymied when a ban on inspections basically closed Melbourne’s real estate market.

Yet just nine days after agencies kicked back into life in October, “we had a bit of luck, got a fair offer and sold”.

While they know Adelaide, and know they want “greater land size, a forever house in the suburbs – from Buleah Park to Stirling – an ideally reduced mortgage debt, and a reduction in the morning commuter grind”, Burton says they’re only interested in buying a house they can visit before signing any contract.

While they’ll miss cosmopolitan aspects of Melbourne, the bonus of going home will be the proximity to grandparents and extended families.

The couple fit the profile of hopeful buyers and renters currently contacting Adelaide agencies. Penny Rigg, director of Klemich Real Estate, says: “Every second day we’re getting emails from mid-30s couples with young children who are telling us ‘we’re heading back’.”

The heritage-protected Victorian stone house neighbourhoods near the good schools are currently the trending suburbs. “They can get a pretty villa with three bedrooms, two bathrooms a pool and grass – which is pretty exciting, from $1.2 million,” she says.

At 84 Fisher Street, Fullarton is a four-bedroom, three living room, meticulously maintained Victorian sandstone house on 1500 square metres with a pool. Priced between $1.5 and $2 million, Nathan Casserly quips, relocators “might be able to finance it by selling their two-bedroom cottage in Melbourne”.

But Rigg says that Henley Beach, which has been developing a buzzy cafe culture, is “also going up and up”. Her agency listed a pretty period cottage two streets from the beach for $900,000 two weeks ago, and had it sold well above that within six days.

The upward pressure across all desirable neighbourhoods is stock levels. “Vendors are nervous,” Rigg says. “So there’s not enough stock.” It’s seeing very high numbers at opens in a market operating normally.

It’s more than normal. Nathan Casserly says of two recent listings fast attracted groups numbering up to 90 people. One, he says, was typical “of what Melbourne buyers are saying they’re looking for”.

If this is the start of a major Adelaide-centric cycle, the three agents see it continuing for some time. “Where we used to have trouble retaining talent,” Casserly says. “The greater (post-covid) flexibility of corporate jobs will probably mean no one will be leaving now.”