Adelaide market still failing to launch: Pete Wargent

We have the lowest interest rates in a generation and yet the Adelaide market is still failing to launch.

Source: RP Data

For what it's worth, my best guess is that there will now be the start of a modest upturn in the Adelaide.

If you were being optimistic, there might be median price gains in the 2-4% region in 2014, but what happens after that?

The economic recovery still looks to be a slow one, but cash rate futures markets imply that we might still see an interest rate rise by March 2015 - and rising rates could easily kill off any momentum before the market has even recovered its previous peaks.

Source: ASX

It could be the perfect bull trap in Adelaide, which I've consistently warned about forever and a day now.

On the other hand, as I've also long predicted, the Sydney market is heading through the roof.

SQM Research's base case is gains of 15-20% in 2014 or a staggering 20-30% if the economy recovers.

I'm not pegging myself to such a bullish prediction, but on the other hand I would not be at all surprised either if the base case proved to be on the money.

Cash flow investors will continue to point towards Adelaide.

My position continue to be unequivocally that Sydney remains a far, far stronger market.


Pete Wargent
is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and blogger.

His new book 'Four Green Houses and a Red Hotel' was released on 1 September 2013.

Pete Wargent

Pete Wargent

Pete Wargent is the co-founder of BuyersBuyers.com.au, offering affordable homebuying assistance to all Australians, and a best-selling author and blogger.

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