Adelaide February 2017

The Smartline Report – February Edition

The month in review: Adelaide

By Herron Todd White
February 2017

Local agents are reporting continued low levels of stock in city fringe, the locations within ten kilometres of the city and in beachside locations. Demand for quality housing in these areas seems set to continue if lower supply levels prevail. There is also continuing activity from developers within suburbs that have undergone zoning changes in recent times such as the Campbelltown and Prospect areas. The outlook for 2017 will largely hinge on any potential interest rate increases and in the northern suburbs, the upcoming closure of the Holden manufacturing plant. Recent media reports have discussed the increasing levels of consumer debt and the high levels of investor activity versus diminishing activity in the first home buyer market segment. Future interest rate decisions will further influence these levels of activity.

Segments worth watching this year are: detached housing in the suburbs of Welland, West Hindmarsh, Renown Park and Devon Park where improved infrastructure is in place; Edwardstown in the southern suburbs (eight kilometres from the CBD); Christies Beach and Seaford (beachside southern suburbs); and quality properties under $500,000 within ten kilometres of the CBD as these are increasing in scarcity.

Welland, West Hindmarsh, Renown Park and Devon Park are all situated within close proximity to solid performer suburbs such as Allenby Gardens, Croydon and West Croydon. These suburbs provide an opportunity for purchasers attempting to enter the latter suburbs but at a more affordable price point. These areas are gentrifying, have increasing levels of in-fill development occurring as well as renovations and upgrades of older, character style housing. The Torrens to Torrens project which is upgrading a large section of South Road will further improve access to these areas and increase appeal to potential purchasers.

Edwardstown is in proximity to the increasingly popular areas of Clarence Gardens and Daw Park and is currently undergoing large levels of in-fill development. Driving through this suburb at the moment, there are a number of dwellings being demolished to make way for higher density, modern housing. The suburb is well serviced and has access to a number of arterial roads, providing good vehicle access to the north and south of the city as well as the CBD.

Christies Beach and Seaford, in particular, provide more affordable opportunities than the neighbouring suburb of Port Noarlunga. The recent electrification of the Seaford railway line has further improved access to this area. The Southern Expressway also provides good access to the Adelaide CBD which will be further enhanced via the Darlington upgrade currently underway. There are increasingly improved facilities in these areas, as there is increasing development in the area, both in-fill and in the Seaford Meadows South development.

Areas such as Happy Valley and Reynella East still provide affordable detached housing under $450,000 which is comparatively affordable compared to many sections of the market.

Land release prices in suburbs such as Penfield and the Gawler area continue to increase. Buyers should be aware that there is quite a high level of stock available of housing that is less than five years old. Quite often a premium is being paid for a new product, when a similar dwelling is available in the same suburb, albeit slightly older.

There is increasing construction of apartments in the Adelaide CBD and given the relatively stagnant values in this market segment, this type of property should be treated with caution.

Adelaide is still the most affordable mainland capital city on a median house price basis. Ongoing infrastructure projects such as the Torrens to Torrens road upgrade, O-Bahn tunnel works and Darlington upgrades are providing continuing employment opportunities for the state and improved facilities for the public. Potential interest rate increases may influence the state’s outlook but at this stage of the year, Adelaide residents in particular are enjoying the Tour Down Under and looking forward to Mad March. We would expect some increased activity in the market leading into February.

Find out more information and to chat with a local Mortgage Broker in Adelaide.

www.smartline.com.au

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 – 2016. Australian Credit Licence Number 385325

 

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