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Adelaide Property Investment

The South Australian property market is showing signs of revival.

Adelaide property investment has made steady gains over the year.  Values in the city are up by 5.9 per cent, the best result outside of powerhouses Melbourne and Sydney, according to RP Data.

Buyer activity also seems to be picking up speed in the capital, SQM Research reports.  Stock levels have dropped by 9.7 per cent in the year to August, an indicator that buyer demand is beginning to climb, according to SQM Research director Louis Christopher.

Adelaide offers properties on both the luxury and cheaper end of the price spectrum.  RP Data reports that 48.7 per cent of properties in the city cost less than $400,000, compared to 13.5 per cent in New South Wales.

The city also has some of Australia’s best-priced inner-ring suburbs.

Dry Creek, less than 10 kilometres from the Adelaide CBD, has a median price of just $255,349, according to RP Data.  Other budget-friendly suburbs include Gepps cross, Mansfield Park, Woodville Gardens and Kilburn.

On the other hand, Adelaide also has its millionaires’ row.  Information from RP Data shows 13 suburbs in the city have a median price over $1 million.  The city’s priciest area is Springfield in the south east, where the median price for properties is $1,819,720.

According to Herron Todd White, the most popular spots for buyers are in the eastern suburbs, especially Parkside and Norwood.  Both these areas are older and well established, making them safe bets for investors.

Buyers and tenants are drawn to the shopping strips, dining and entertainment precincts, good schools and appealing property types typical of the eastern suburbs, Herron Todd White states.  According to their report, ongoing gentrification over the past 30 years has made these areas more expensive, but un-renovated properties are still available.

Close in to the city, Adelaide is suffering from a shortage of available housing options, according to Herron Todd White.  The firm reports that quality, well-priced properties are selling quickly in the inner ring.

In the northern suburbs, however, Herron Todd White warns buyers to be wary. New land estates have led to an oversupply developing in these areas, which may depress property value growth. 

SA Top Yields

The Adelaide rental market is slow moving, despite favourably low vacancies.

Citywide, vacancy rates are at just 1.5 per cent, according to SQM Research.  Such low availability generally indicates a shortage rental accommodation and high competition among tenants.

Nonetheless, asking rents have been fairly stagnant in the capital.  SQM data shows house rents fell by one per cent in the past 12 months and climbed by just 2.4 per cent in the past three years.  The unit market has been even flatter, falling 0.2 per cent in the year and edging up just 1.2 per cent since 2011.

Even popular suburbs have had volatile rental growth.  Parkside in the city’s east, considered one of Adelaide’s premier areas, has seen asking rents for houses slide by 11.9 per cent over the past year, according to SQM.  This comes despite availability sitting at least 1.2 per cent.

Conditions in mining areas remain highly changeable.  As an example, Roxby Downs has elevated vacancy rates of 4.3 per cent – however, this represents a massive drop from early 2014, when availability was at more than 10 per cent.  Over the past three years, asking rents for houses in this town have dropped by 22.6 per cent.

The larger town of Port Pirie, on the other hand, is more stable.

Vacancies are at 2.1 per cent and house rents are up by 31.7 per cent over the past three years.

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