CoreLogic National housing Update August 2018
August Market Outlook
Hotspots: New report reveals top 50 ‘growth’ suburbs around the country
Preparing for a spring sale? Spruce up your home for less than $5K
Adelaide August 2018
Brisbane August 2018
Cairns August 2018
Canberra August 2018
Darwin August 2018
Gold Coast August 2018
Melbourne August 2018
Newcastle August 2018
Perth August 2018
Regional NSW August 2018
Regional QLD August 2018
Regional VIC August 2018
South West WA August 2018
Sydney August 2018
Wollongong August 2018
CoreLogic NSW housing Update August 2018
CoreLogic QLD housing Update August 2018
CoreLogic SA housing Update August 2018
CoreLogic VIC housing Update August 2018
CoreLogic WA housing Update August 2018
Borrowing for over 50s
3 innovative ways to break into the property market
Why should I get a pre-approval?
Adelaide August 2018
The month in review: Adelaide
By Herron Todd White
Adelaide, South Australia 1968: Steele Hall defeated Don Dunstan in the state election; the state population was 600,000; the average annual wage was $3,000 and the median house price was pushing towards $12,000. In 2018, the South Australian political, economic and social landscape is looking slightly different to that of 1968. In 2018, Steven Marshall defeated Jay Weatherill in the state election, the state population has tipped over 1.7 million, the average annual wage is $75,000 and the median house price is $470,000. In those 50 years, Adelaide has transformed itself from a big country town to a city continually rated as one of the most liveable in the world.
During the 1960s, housing remained traditional in suburban Adelaide. Single level brick dwellings with 3-bedrooms and 1-bathroom on quarter acre blocks were the norm. Strata units where prevalent during this period and offered a cheaper alternative to the dwelling market.
The dwelling market in 2018 is a stark contrast to 1968. In 2018, children stay at home longer and technology has allowed for decentralised work spaces giving the labour force the ability to work from home. This has caused a shift in housing design. The demand for additional space has given birth to the fourth bedroom, en suite, study and second living space.
The days of double brick construction and quarter acre blocks are long gone as builders and developers look for cheaper and more cost effective alternatives. Brick veneer has become the new norm for single level construction whilst lightweight composite cladding has become the material of choice for the suburban Adelaide townhouse boom.
With the hills to the east and coast to the west, suburban Adelaide has been forced to expand north to south. Former satellite suburbs of Sellicks Beach to the south and Munno Para to the north now form part of suburban Adelaide and stretch 80 kilometres apart. Town planning has been forced to change to counteract the continuing urban sprawl. There has been a push for the construction of higher density accommodation with suburban councils. Development constraints have been relaxed, allowing for high density development of parent allotments. Recent changes have allowed for allotments of 100 to 200 square metres which require two level townhouse style construction.
Examples of this new style of accommodation can be seen throughout suburban Adelaide. The Campbelltown Council north-east of the CBD has become one of the epicentres of this style of construction. In this location this type of product ranges in price from $400,000 to $650,000. Recent examples include 6A Day Avenue, Rostrevor achieving a price of $635,000 and 5/2 Avenida Street, Campbelltown achieving a price of $443,000.
Many downsizers are reaping the rewards of the zoning changes as their traditional dwellings now have the added benefit of underlying development potential. In the later part of 2017, the Port Adelaide Enfield Council north of the CBD implemented the Urban Renewal Zone with a focus on higher density development. Prior to this zoning taking effect, 54 Gladstone Avenue, Kilburn was sold for $415,000. This was a 3-bedroom, 1-bathroom dwelling on 975 square metres of land. The house was demolished and the property was offered to the market as a vacant allotment. In this time the zoning changed and the property was sold again in February 2018 for $515,000.
The increase in community titled accommodation has seen the extinction of the cream brick strata unit in suburban Adelaide. Strata units remain popular with first home buyers and investors as they typically provide the lowest point of entry into the market.
The opposite is true for the Adelaide CBD as the construction and the sale of strata apartments has reached an all-time high. During the 1960s and 1970s, standard CBD apartments comprised complexes of up to five levels in height, no passenger lifts and basic common areas. With the rapid increase in construction of apartments, developers need to provide high quality common areas to stand out from the crowd. We are now seeing infinity pools, roof top terraces, gymnasiums, theatres and technology hubs in new complexes. CoreLogic data indicates that the CBD apartment market appeared to peak in late 2017 into early 2018 with the median price reaching a high of $500,000. The most recent data from April 2018 shows a slight decrease to a median of $495,000. An example of what can be purchased at this median price level is 1501/156 Wright Street, Adelaide which recently achieved a price of $528,000. This is a sixth floor apartment comprising 2-bedrooms, 1-bathroom and a secure car space. This apartment is situated in the recently constructed Bohem apartment complex.
From 1968 to 2018, the median house price grew close to 4000%. At that rate the median house price in 2068, 50 years from now equates to $19.27 million. My response to that is tell him he’s dreaming… but in 1968, they probably said the same thing.
DISCLAIMER: The information contained in this article is correct at the time of publishing and is subject to change. It is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, Smartline recommends that you consider whether it is appropriate for your circumstances. Smartline recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.