Adelaide's property markets are still hot.
The median home value in South Australia's capital reached more than $945,000 in June, according to research firm Cotality. That's equal to an annual increase of 11.6%.
"It's no secret the Adelaide property market post COVID-19 has been booming," Joey Delis, director, finance broker and franchise owner of Loan Market Glenelg in the Greater Adelaide area, told Australian Broker. "I've seen the average loan size almost double from $350,000 — when I started in 2017 — to more than $600,000."
But after years of rapid price growth, many aspiring homeowners and investors are asking the same question: has Adelaide's property boom left them behind?
For Australian Broker's latest Spotlight Series — where we highlight standout professionals in Australia's finance and mortgage broking sectors — we caught up with Delis to get his take on the market, what buyers and investors need to know, and how he's navigating today's shifting market dynamics.
The following interview has been edited for grammar and clarity.
JD: It's no secret the Adelaide property market post COVID-19 has been booming. I've seen the average loan size almost double from $350,000 — when I started in 2017 — to more than $600,000 now. On that front, I believe we have been in one of the best markets. The key challenge for South Australia has always been our average loan size, which is still relatively small compared with New South Wales and, previously, Victoria. This means we have to write work with a higher volume of clients to challenge the larger businesses across Australia. All things being equal, I strongly believe SA businesses are some of the best in the country and have the hardest working and most efficient brokers.
JD: The old saying, 'The best time to plant a tree was 20 years ago,' is how I feel about the property market. The property market, for many, is a long-term play. And history tells us today's over-priced property is tomorrow's bargain. My only advice to clients is if they are buying, make sure they can afford the repayments through market downturns. Market downturns do happen. But if you can hold the property through those periods, it will generally bounce back quite quickly. Affordability — not over stretching — and ensuring you have a clear exit strategy if things don't go to plan, is the key to success.
JD: The markets have changed significantly — close to the levels of COVID-19 and the Royal Commission, in my opinion. We have seen a significant reduction in investor activity for established homes. But investors are moving towards construction finance lending. Like many, I'm not supportive of the Labor government's budget changes, overall. I believe if they truly wanted to take investors out of the market, they should have removed negative gearing from new homes, as well, in conjunction with reduced taxes on businesses and shares. That would have made investing in other sectors more attractive. What they have done has pushed investors and first-time homebuyers to the same types of properties, which will make it increasingly harder for first-time homebuyers to get into the market. But my biggest concern is what happens when they try to sell those homes after which they are no longer new? Who will want to buy them? Will they achieve the same price at sale as when they originally purchased it? Or will they fall into negative equity?
JD: Navigating these times is all about understanding what the cause is. Once you can understand the cause, you can plan effectively. History tells us the bad times are never as long as we expect them to be. And personally, I feel rates will come down once the war in the Middle East nears completion, which has been a large driver of increased costs. I'd also love for the Labor government to stop their inflationary spending. For clients, it's about having an overall strategy: building a strong team around you of brokers, financial planners and accountants, and seeking appropriate advice from those individuals. Don't get fatigued or disillusioned; continue to save as much as you can so when the good times returns, you're ready to capitalize. Consistency wins in every facet of life.
JD: I'm seeing it's increasingly difficult for people to own even one investment property. We have an increase in bridging finance, where clients are selling their existing homes to purchase larger family homes, rather than retain their original home as an investment. It's a significant shift in mindset from the past 10 years, and one that worries many Australians because they can't see any other way to build wealth in our country and protect their families future.
