Low lending rates combined with low unemployment and an immigration rebound will see Adelaide house price growth remain strong through 2022. In this post we provide an overview of house price performance in 2021 and outline our 2022 forecast.
A recap on the record-breaking year that was 2021
Looking at performance in 2021, we had predicted a record breaking year and were still surprised with the speed with which house prices in Adelaide increased. We forecast growth of 9% for 2021 and this ended up being very conservative. Prices increased at their fastest rate since 2008, around 23% across the year, and continued the trend of doubling every 10-15 years since 1990.
Adelaide's median house price grew to $570,000 – a record high that is continuing to rise in the first months of 2022. Other capital cities saw records broken but their growth softened towards the end of last year and into the beginning of 2022. In contrast, growth continued at an unchanged pace in Adelaide and Brisbane.
Forecast for 2022
We are forecasting a growth of 11% for house prices across Adelaide in 2022. This will push the median house price to just under $630,000 (see graph below – dots are quarterly forecasts). Demand from first home buyers will continue to push up prices.
Interstate investors will also show further interest in Adelaide as they chase higher growth than is present in major cities, Sydney and Melbourne. Towards the end of the year, house prices will likely soften slightly if interest rates go up, and this might not occur until 2023. We forecast that immigration will likely offset a lot of the impact of interest rate increases because it will fuel population growth.
Forecasts for 2022
In particular, suburbs that have good fundamentals, including good quality infrastructure and close proximity to the city, are expected to grow the most over the next 12 months. Our top 5 suburbs for 2022 are:
For more information, see our 2022 top suburbs report here: https://www.propertyinvestmentcoaching.com.au/post/the-top-suburbs-to-invest-in-2022