The month in review: Adelaide
By Herron Todd White
May, 2010
Arguably Adelaide’s finest suburbs and therefore most
expensive are Unley Park and Medindie/Gilberton. These
suburbs are characterised by heritage style mansions
built in the late 1800s or early 1900, located along treelined
streets. Both suburbs are located close to the CBD
and in areas close to prestigious private schools and
among popular shopping areas with easy access to all
facilities and services with the focus being on the quality
of lifestyle.
Both suburbs are dominated by desirable high quality
dwellings with floor plans in excess of 200sqm2. Typically
many of these dwellings have multiple living areas, threeplus
bedrooms and two-plus bathrooms with extensive
high quality fit out. Located on large allotments starting
around 1000sqm most have either a swimming pool or
tennis court (or both) with excellent outdoor entertaining
areas surrounded by established, well-maintained
landscaped gardens.
The majority of these houses are owner occupied often
being held and passed down within the family group,
making these highly desirable areas tightly held with
limited sales evidence.
The price tends to start from the $1 million mark, with
the average around $1.2 to $2.4 million. The start of 2010
has seen a few recent sales in the $3 million range and
one sale topping $4 million. The bluestone residence
built circa 1890 located in Unley Park on an allotment
over 3000sqm also includes a two storey sandstone guest
house for a total living are of 540m2 with an in ground
swimming pool.
The top end of the Adelaide residential market has
remained relatively stable with solid capital growth over
the long term, however the recent GFC has had a noticeable
negative impact on the value of these properties. As
confidence is starting to return to the housing market
some of this loss has probably been regained with the
values now holding steady. Traditionally interest rate
movement has little if any impact on this demographic.
There is limited rental evidence existing for these
properties due to most being owner occupied. Rentals
in Adelaide for this style of accommodation is generally
capped around $1200 per week, therefore low rental
returns make these properties poor investments.
Two of Adelaide’s most affordable suburbs would be
Elizabeth East to the North and Hackham West to the
South. Both are very similar suburbs with 1970s built
houses located around Housing Trust developments of
the late 1960s. Houses are relatively basic in construction
and appeal comprising three bedrooms, one bathroom
and no under cover parking, with a total building area up
to 120msqm. Average block size is around 600 to 800m2
in Hackham West and 500 to 700m2 in Elizabeth East. The
mostly basic dwellings have basic gardens and maybe an
iron garage.
Prices range from around $200,000 to $250,000 at
Elizabeth East and slightly higher from $220,000 to
$270,000 at Hackham West.
Both suburbs are located towards the outskirts of the
Adelaide metropolitan area with facilities and services
located at large sub-regional centres such as Elizabeth
City Centre and Colonnades.
The majority of purchasers within these areas are first
home-buyers, with these suburbs experiencing recent
periods of capital growth due to the Government’s FHOG
Boost scheme. As this incentive in no longer available the
values of these properties is likely to remain stable during
2010.
Investment within these suburbs can be financially
rewarding, both in the short term with affordable entry
prices and rental returns around $250 per week for a yield
around 4% (average Adelaide metro yield around 3%)
and possible capital growth in the long term.
This end of the market is most likely to be effected by the
rise in interest rates expected to occur throughout 2010,
the extent of this impact will be monitored over future
months.
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