By Herron Todd White
Since the post GFC slump, the Adelaide metropolitan housing market has been on a meteoric rise. Throughout 2011 and 2012, a lazy half million was a king’s ransom with the median house price hovering in the high $300,000s. In 2019, the ability to purchase the average metropolitan home, cover your stamp duty and still be left with some change has since past.
The options to purchase a traditional dwelling at this price point in the inner ring have become scarce, particularly the inner north, east and south. Most commonly available are courtyard homes of varying age, quality and condition in locations with negating environmental factors. Examples include 183A Portrush Road, Maylands ($500,500), a circa 2008 community titled threebedroom, two-bathroom dwelling and 10 Nairne Terrace, Forestville ($490,000), a partially updated character cottage disposed as three bedrooms and one bathroom. Both properties are poorly located with Portrush Road being a major transport route and Nairne Terrace located opposite a railway line.
The inner west provides the best variety in housing stock at $500,000. The price differential between the inner west and remaining inner ring can be attributed to Adelaide Airport located 6 kilometres west of the CBD. The suburbs of Mile End, Hilton, Thebarton, Cowandilla and Torrensville are all situated between the CBD and airport and are characterised by early 1900s dwellings on a mixture of allotment sizes. Purchasers in this area will have to compromise with intermittent aircraft noise from 6am till 11pm… but for those with a little bit of Darryl Kerrigan in them, this shouldn’t be a problem. Located only 3.5 kilometres from the CBD but one kilometre from the Adelaide airport runway is 27 Spencer Street, Cowandilla which transacted in April for $511,500. This property provides an original circa 1920s bungalow disposed as four bedrooms and one bathroom on a 725 square metre allotment. Comparatively, the remainder of the inner ring price points for similar properties 3.5 kilometres from the CBD start in the early $900,000s.
In the middle ring, we are starting to see a tale of two property types at this price point with new builds and properties with development potential being most commonly available. The southern suburbs of Mitchell Park, Sturt and Seacombe Gardens are located some ten kilometres southwest of the CBD and have been popular with investors, developers and first home buyers over the past 12 months. These suburbs are serviced by a number of large community hubs and have easy access to the CBD via the recently upgraded South Road and the Seaford train line. Examples of the differing property types available include 9A Greenock Drive, Sturt ($480,000), a circa 2018, two-bedroom, two-bathroom dwelling on a 265 square metre allotment and 49 Limbert Avenue, Seacombe Gardens ($520,000), a circa 1950s weatherboard dwelling on an 800 square metre allotment.
Depending on which direction you go from the CBD, $500,000 can be considered the market ceiling or just a starting point in the outer ring. The northern suburbs hits a price ceiling in the mid to high $400,000s, making the properties available at $500,000 the cream of the crop. Properties at this price point are typically found in new subdivisions, particularly surrounding Blakeview and Angle Vale. The sales of 2 The Avenue, Blakeview ($540,000) and 41 Fantasia Drive, Angle Vale ($500,000) represent the market at this price point. These properties each provide similar accommodation with 2 The Avenue, Blakeview being situated on a 595 square metre allotment in a traditionally metropolitan suburb and 41 Fantasia Drive, Angle Vale being situated on a 1,875 square metre allotment in a rural residential location.
The outer ring north-east of the CBD was predominantly developed throughout the 1990s to early 2000s. The suburbs of Greenwith, Golden Grove and Wynn Vale characterise this region. Properties available at the half million price point are predominantly disposed as four bedrooms and two bathrooms with updated interiors and above average site improvements. Representing this price point are the sales of 11 Newark Court, Greenwith ($511,000) and 13 Kable Court, Golden Grove ($490,000). Providing four bedrooms and five bedrooms respectively, both have been partially updated with 11 Newark Court featuring a below ground swimming pool.
The deep south provides opportunities to purchase in proximity to the beach at a fraction of the prices paid due west of the CBD. The compromise is the location, with the likes of Moana, Aldinga, Seaford and Port Noarlunga being upwards of 30 kilometres from the CBD. Located on the Seaford Esplanade and achieving a price of $510,000 was the sale of 259A The Esplanade, Seaford. This property provided a circa 1990s courtyard home in average condition disposed as three bedrooms and two bathrooms. This is a tale of worst house in the best street with prices on the Esplanade typically starting in the high $600,000s. More substantial dwellings such as 21 Basin Street, Aldinga Beach ($515,000) can be purchased a drop punt back from the Esplanade. This sale comprised a circa 2005 brick veneer dwelling disposed as four bedrooms and two bathrooms on a 740 square metre allotment.
For those looking to park their money, the inner and middle rings appear to be best positioned to achieve any capital gains over the next 12 months. Within the inner and middle rings, the $500,000 price point is providing gross rental returns of around five per cent. Purchasers at this level should feel confident with both the rental and sales market remaining stable over the next 12 months. The outer ring continues to provide gross rental returns above seven per cent however at a lower purchase price point. Particularly in the north, the lower achievable rentals are deterring investors from entering the market at the $500,000 price point.
There are scores of properties available at the $500,000 price point in suburban Adelaide. Depending on which direction you choose from the CBD, a different property type will be available. Compromises may have to be made but there is something out there for everyone.
Speak with an Adelaide Mortgage Broker today.