The Smartline Report – August Edition

The month in review: Adelaide

By Herron Todd White
August 2015

Building costs have risen steadily over the past five years with the primary drivers being rising labour and material costs, increasing red tape, and increasing cost of environmental and regulatory compliance. There are limited government grants on offer and market demand for new housing has been relatively slow. Investors are providing some support for the building sector both in the detached and medium density markets.

There is some infill development occurring in the western suburbs and a significant project due to start in the next year or two. This is the redevelopment of the former home of South Australian Football formerly Football Park and surrounds. There will also be a significant redevelopment occur in the eastern suburbs on 44 hectares within former health facility grounds in Glenside. Both of these developments are in the early stages of planning but are expected to be mid to upper range housing projects.

In terms of building costs there are three main brackets being, lower end at around $1,250 per square metre and much of this development is in the outer suburbs. Middle suburbs are tending to be developed with better quality housing with an average cost being about $1,600 per square metre but costs vary greatly with the variation in standard of fittings. Upper level housing is highly variable with prestige projects costing up to $5,000 per square metre, but the average from what we are seeing is around $3,500 per square metre.

Upper end housing tends to occur within a 3 kilometre range of the city and along the coastal strip from Seacliff to Largs Bay.

Housing demand in the outer suburbs, and in particular in the northern suburbs is expected to be soft in the coming years due to the closure of several manufacturing plants. It may follow that cost of lower end construction may remain steady rather than rise in the next couple of years.

Please note that information in this publication is subject to change without notice. Smartline assumes no responsibility for any errors, omissions or mistakes in this document. © Smartline Home Loans P/L 1999 – 2015. Australian Credit Licence Number 385325


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