It’s no secret the rise in interest rates has created additional mortgage stress across the country. This is especially being felt by those 800,000 home owners who are rolling off their fixed interest rates of under 2% and are being met with rates of over 6%. This stark increase in monthly repayments coupled with increased taxes (like land tax), is causing many home owners across Australia, particularly in the larger cities, to exit the market.

And unfortunately many are doing so at a loss. Sydney and Melbourne recorded the highest percentage of loss-making sales in the country of 10.7% and 10.2%, respectively. In contrast Adelaide stands as an exception to this trend, boasting one of the highest proportion of nominal profits.

What is making Adelaide so attractive?

Adelaide is attracting property investors who are looking for less exposure and quality returns. Several factors contribute to Adelaide's resilience, one being its lower median house price. At $654,000, Adelaide offers a more affordable price point to enter the market, and is significantly lower than Sydney's average house price of $1,052,000 and Melbourne's $755,000.

While investors in Adelaide are not immune from rate rises and certainly feel their impact, thanks to lower mortgages, investors’ exposure is reduced. Adelaide is also achieving strong rental yields of 4.1%. In comparison, Sydney and Melbourne are seeing rental yields of 3.2% and 3.5%, respectively.

With experts predicting at least two or three rate rises this financial year, it’s expected that more sellers on the eastern seaboard with high debt exposure, will be forced to sell. We envisage many will choose to reinvest in a smaller, and less exposed market like Adelaide, Brisbane, Canberra or Hobart to combat the new investing landscape.