Units in Adelaide showed the most growth nationally over the past 12 months, according to a new study by RP Data.
The study ranked the top 50 growth areas in Australia, and 19 were in the greater Adelaide metropolitan area. That was the most of any capital city. Over the past 12 months to June 2008, unit values within the broader Adelaide market increased 19.2%, according to RP Data.
"Despite this rapid rate of growth, Adelaide still boasts the second most affordable unit values of any capital city," said RP Data research analyst Cameron Kusher.
Kusher said that with value growth slowing throughout Australia, selecting strategic locations for best capital growth is becoming difficult.
"During 2008, value growth prospects slowed throughout the nation," he said. "However, Adelaide has continued to perform well, albeit at a reduced rate of growth to that recorded during 2007."
The suburbs were ranked by RP Data based on 12-month growth in their value. The top five growth suburbs in the study were Evandale, SA (49.3%); Port Hedland, WA(47.6%); Kurralta Park, SA(44.8%); Ayr, QLD(44.4%); and Findon, SA(44.1%). Of the top 50, the best average annual growth over five years was in Redbank, WA (30.7%) and Farrer, ACT (22%).
Other than Adelaide, Melbourne also performed well, with seven suburbs listed in RP Data top 50.
"Given that value growth has now slowed, it is likely that the strongest performing unit markets will be in the inner city and coastal areas," Kusher said. "Undersupplied resource-intensive towns are also likely to perform well."
Over the next two years, Kusher said that gross rental yields are also likely to continue to improve as price growth slows and invest focus switches from value growth to rental return.
The highest rental yield for the top 50 was in Tanah Merah, QLD (7.4%), followed by Whyalla Stuart, SA (6%).