Chief Economist at the Macro Investor Leith van Onselen shared his 12-month price forecasts for Australia’s capital city housing markets based on consideration of key price drivers: housing finance; housing supply; affordability; and the macroeconomic outlook.
Adelaide: -5% to -2%
Adelaide’s housing market has performed surprisingly well, experiencing the lowest decline in values from peak in the nation (3.7 per cent for houses and 3.6 per cent for units as at May 2012, according to RP Data-Rismark). However, the good fortune is unlikely to last, with prices predicted to fall by 2 per cent to 5 per cent over the next 12 months.
Although Adelaide housing provides better-than-average affordability when measured against incomes, prices are more expensive than average when compared with rents.
The overall supply situation in Adelaide is deteriorating. Dwelling construction relative to population growth is the highest in the nation, whereas the number of homes for sale is elevated and some 3 per cent higher than the same period last year.