The key to the future of Adelaide's property market may lie with a sleeping giant, 560 kilometres away. With property values already on a steady rise, the recently approved proposal for an expansion of the Olympic Dam is set to have a long-term impact on the prices of property in Adelaide.
Nonetheless, in speaking to Your Property Investment Magazine, BIS Shrapnel senior manager of residential property Angie Zigomanis said while a lot of people are talking about Olympic Dam, it's unlikely to have immediate results for the prices of real estate in Adelaide. "It's going to be there for the next 40-50 years as a project," he said.
BHP Billiton first proposed the expansion in 2009 in order to extract the estimated $1trillion worth of mineral resources still hidden deep beneath the soil. However, the project was shelved in 2012 due to falling commodity prices, capitals costs and environmental concerns.
In recent months, prime minister Tony Abbott has confirmed that BHP Billiton will go ahead with the project in upcoming years, with an application to trial new extraction methods being passed through Federal government. These trials, according to BHP Billiton chief executive Andrew McKenzie, will "help to unlock the full value of this unique ore body."
As yet BHP Billiton can't pinpoint the exact number of jobs the expansion will inject into the South Australian economy, but it's expected to be considerable – the benefits of which will likely be felt most keenly in Adelaide. As was the case in Western Australia, an influx of permanent and temporary workers seeking accommodation will likely provide a welcome boost to the local economy.
The potential that Olympic Dam brings to the city's property market is immense. According to CoreLogic RP Data House Value Index, dwelling values having already increased 4.3 per cent in 2014. As well, it can only provide a positive outlook for those with property in Adelaide, or who are looking to add a couple more to their portfolio.
While it is not likely to have any short-term effects on the values of your property, discuss with your local real estate agent about any implications in the long-term. After all, the development may prove an attractive incentive to those looking to a future in Adelaide.
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