Adelaide Property Investment
The Adelaide investment property market still has further to fall before it hits rock bottom, according to valuation firm Herron Todd White (HTW) in its latest property market round-up.
Looking at the Adelaide property market over August, HTW valuers say the volume of both home and unit sales are declining while demand for new housing remains soft.
The latest report notes that new Adelaide houses and units are “almost never” sold at prices exceeding their potential resale value.
And the outlook for Adelaide into 2013 remains on the gloomy side.
“The Adelaide property market in the short term continues to be flat and limited growth is expected in the next 24 months,” says HTW in its latest report.
Despite reporting that capital values are still declining, the situation is not all bleak for property investors, with HTW reporting that it remains a balanced rental market for both houses and units, with the vacancy rate steady in the case of houses and “stable” for units.
Adelaide Hobart and Canberra are the only three capital city property markets still in a downswing.
According to HTW, the Adelaide market has been in decline for the past year.
Projections for 2013
The Adelaide detached housing market may be about to turn the corner but the unit market outlook is weaker with take up of new apartments remaining sluggish, according to the WBP Property Group.
The valuation and advisory firm places Adelaide houses at six o’clock on the property clock, indicating that the market has just bottomed out.
However, it says the unit market is still at five o’clock indicating that supply still exceeds demand.
WBP says the Adelaide residential market is showing “some signs of recovery, in particular well located stock that has realistic market expectations”.
"Property values appear to have stabilised in most parts of metropolitan Adelaide," says WBP.
However, it adds that recent announcements regarding BHP Billiton’s shelving of the Olympic Dam mining project expansion “may have a negative effect on the state economy and confidence”.
WPB says the Adelaide unit market is relatively flat “with a number of new unit apartment projects struggling to get off the ground as a result of lack of pre-sales and other funding issues”.
“Existing stock remains slow to move, with significant price reductions being experienced,” says WBP.
One of the biggest Adelaide apartment projects is the recently announced Mayfield mix-used urban regeneration project in the heart of the CBD, which will feature 427 apartments – including one-, two- and three-bedroom residences.
“Ongoing stamp duty incentives will only help projects like this succeed,” says WBP.
Under a two-year trial, stamp duty has been abolished for people who buy an apartment off the plan for under $500,000, but only in the Adelaide CBD and North Adelaide.
The $240 million Mayfield project covers the 7,377-square-metre site of the former Mayfield Electrics factory bordered by Sturt, Gilbert, Norman and Myers streets and is being developed by Sturt Land, having been designed by architects Woods Bagot.
In her departing speech as presiding member Adelaide City Council Development Assessment Panel (DAP) earlier this month, Shanti Ditter said developers needed to build a variety of dwellings including those that cater for families.
"DAP has expressed its concern that if that were to continue, the city will see lots of one and two bedroom apartments which will drive a particular sector of the market or demographic and potentially leave out another sector of the demographic that might be interested in living in the city,” said Ditter in a speech reported in The Australian
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