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Adelaide Property Investment

The ripple effect is evident in the Adelaide property investment market in 2016, with the outer northern and southern suburbs generally the last to see an increase in prices.

The Adelaide property market is an elongated pond with the geographic restrictions of the hills to the east and coast to the west.  Coastal suburbs are likely to see the increase in prices at a similar time to the inner suburbs, while those to the far north and south are the last.

Infrastructure and employment do play a part in property values, however this sees localised property increases rather than the stone-in-the-pond analogy.

Over the past year Adelaide's eastern suburbs have seen the greatest property price gains.

Norwood, for example, which is just east of the city, is very popular with a number of buyer groups including young couples.  The Parade shopping and café precinct is very popular and public transport is readily available.  This suburb has a variety of dwelling types available to purchasers, from 1960s-style units and modern infill development to traditional character dwellings on allotments of up to 1,000 square metres.

The coastal suburb of Glenelg to the west of the CBD has also experienced an increase in capital growth, particularly the lower end of the market.  This suburb has a popular family bench, retail outlets and numerous restaurants and cafes.  Units start from prices in the low- $300,000s, and at these prices they're popular of late with both owner-occupiers and investors.

As for what's next to go, it's the bridesmaid suburbs property investors should watch, i.e. those areas adjacent to the ones that have already seen the best growth.

These include Somerton Park and Glengowrie around Glenelg.

Units within Somerton Park start from $300,000.  Houses in Glengowrie start from $500,000, with recent infill development of modern dwellings generally of three bedrooms and two bathrooms starting from the mid- to upper-$600,000s.

Beulah Park and Maylands adjoining Norwood.  A largely original two-bedroom, one-bathroom unit in a two-storey, six-unit group sold in Maylands for $325,000, which gives an indication of the entry point for property in the suburb.

Around Henley Beach, the suburbs include Fulham and Fulham Gardens.  Both are further away from the beach and there are good buying opportunities.  A modern three-bedroom, two-bathroom infill dwelling sold in the mid-$500,000s in Fulham Gardens, while in Fulham there's a four-bedroom, two-bathroom, 1990s constructed dwelling on the market with an asking price of $560,000 to $590,000.

The medium-term is set to bring low but steady growth in the city of churches.  There's high unemployment in South Australia and it's playing on property investor confidence.

Adelaide Property Market Overview 2016

Adelaide remains an investment property market that bounces along the bottom but holds great upside potential in the eyes of many property analysts.  Its wave map shows it also has a fairly regular growth model, with hot points currently sitting within the five- to eight-kilometre band, particularly in the northeast.

Adelaide's market interesting because it's the exception to the common rules of market performance. It has the worst performing economy on the mainland and there are arguments that it's the worst performing economy in the country, but Adelaide's housing market continues to produce what you would call resilient and even robust results.  It's certainly likely Adelaide house prices this year will grow at a higher rate than last year.

The northern suburbs of Adelaide have been under-performing because they've been hit by such events as the collapse of the car manufacturers, but markets closer to town are more robust and still price-accessible.

There's a shortage of rental property, yields are certainly quite attractive, and there are capital growth prospects given that the economy has been an under performer.

This may be attractive for investors looking for a market in which they can rest their capital after the exhausting rollercoaster ride of somewhere like Sydney. Perhaps the tonic is Adelaide, with its conservative steady market and solid rental demand.

A lot of agents have been commenting that they've been getting much higher levels of enquiry into Adelaide from those investors who have a transitional capital city focus.

Being right at the front of the wave requires great instincts on which direction the swell's sweeping.  To stay ahead of the break, one must undertake consistent assessment of property markets involving not just sales analysis but also regularly talking to locals.

Getting this on-the-ground information on a national scale is beyond the means of most casual observers.  Fortunately, independent property analysts from around Australia have given us an all-access pass, on a city-by-city basis, on how they feel capital city markets are tracking.  They've also identified 24 suburbs around the national where the wave is set to break.

Contact us for a free information pack on Adelaide property investment, or to arrange an obligation free consultation.