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Wednesday, November 25, 2009

Adelaide house values soar


November 08, 2009 12:15am

ADELAIDE houses have jumped the most in value of any Australian city, except for Perth, in a decade with the average home worth almost $250,000 more than in 1999.

The first review of property prices between 1999 and 2009, based on Valuer General figures, show sale prices for the whole state have soared an average 190 per cent.

This is compared to the sharemarket which rose 143 per cent over the same time.

The booming decade also saw the first Adelaide suburb break the million dollar average mark Unley Park in 2005.

Overall, the hottest properties were located predominantly in Adelaide's northern suburbs.

Full list: How your suburb performed in the past decade

Real estate experts are predicting that values will continue to escalate by 2019, they expect the average South Australian house will cost $684,000 and the number of million-dollar suburbs will soar to 69, leaving thousands of householders with homes worth seven figures.

The Real Estate Institute of SA said the imbalance between housing supply and buyer demand in SA had driven rapid property price rises in the past decade.

The average SA house increased from $124,000 in September 1999 to $360,000 in September this year.

"The population increase is driving demand and the State Government's 30-year plan shows a continual increase in population,'' REISA chief executive Greg Troughton said.

"Perth did so well because of the mining boom and we did well because we were coming off such a low base, Adelaide is still relatively affordable and people are looking across the border saying they can buy a nice investment property here.''

Of the top 20 suburban price movers, nine were in the northern suburbs, six in the south, five in the west and none in the east, according to Valuer General figures.

Real estate agent Anthony Toop said much of the increase in northern property prices was land based.

"There has been a lot of redevelopment in this region, with people subdividing the big blocks and major new housing projects such as Mawson Lakes and Playford Waters in Smithfield,'' Mr Toop said.

"And the way things are going, if there is no significant change to the State Government's land release policy, it is highly likely you will see the increase in Adelaide house prices of the past decade repeated in the next.''

Brock Harcourts CEO Greg Moulton agreed, adding the predicted jump in million-dollar-plus suburbs was not surprising.

"When I started in the business 20 years ago a million dollar sale was celebrated for a week - now $1 million buys you a three-bedroom home in Unley and you don't get a pool or a tennis court,'' he said.

The booming property market has also swelled State Government coffers by hundreds of millions of dollars annual land tax and stamp duty jumping from $738 million to $1.24 billion this decade, according to State Budget papers.

Independent Upper House MP John Darley said the government should follow the lead of local councils and adjust the property tax levy to increase at the same rate as inflation.

"Otherwise as prices increase so does the land tax (charged on investment properties) - which is eventually passed on to renters - and the amount of stamp duty paid by homebuyers,'' Mr Darley, a former Valuer General, said.

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