Adelaide July 2017

The month in review: Adelaide

By Herron Todd White
July 2017

Whilst Adelaide remains the most affordable mainland capital city in Australia, the current median price of $432,000 (current as at 31 May 2017 according to Corelogic Hedonic Home Value Index) has increased from a median price of $410,400 (as at 30 April 2016). Although there are still countless properties available around $500,000, there is an increasing scarcity of detached dwellings in this price range within proximity of the CBD. The market for older units and townhouses regardless of location remains relatively flat. We have focused on detached housing for investors.

It is reasonable to expect detached housing at $500,000 or below within 20 kilometres of the city but as noted, the closer one moves towards the city, the more the quality and size of detached housing decreases at this price level.

Demand for older units and townhouses in locations further from the city may begin to increase should prices for detached housing continue to increase. There is an increasing supply of new apartments in the Adelaide CBD which are tending to attract investors. It is viewed as a more attractive option than older style inner city units and townhouses due to stamp duty rebates and potential tax reduction strategies.

The market for properties in proximity of the CBD at this price level continues to be extremely buoyant. In areas with increased in-fill development, investors and developers have been driving demand and competing with first home buyers attempting entry into the market.

In an area such as Flinders Park situated six kilometres west of the CBD, buyers seeking properties for $500,000 a couple of years ago have now been priced out of the market as the market has improved in that area within a short period of time. The suburb is situated adjacent to the linear park and in between the city and the sea and has become an increasingly popular suburb as a result.

Popular areas that offer properties around $500,000 include suburbs such as Pasadena, Hope Valley and Croydon Park.

Pasadena is situated to the south of the Adelaide CBD and is well serviced by the popular Pasadena Foodland and shopping centre. Whilst sections of the suburb are undergoing some in-fill development, this suburb offers older style dwellings reasonably close to the city at an affordable price level.

Hope Valley is situated further from the city, approximately 13 kilometres to the north-east. This suburb is well serviced by a number of shopping centres including Tea Tree Plaza and is also situated in proximity to the Tea Tree Plaza interchange which provides easy access to the Adelaide CBD via the O-Bahn busway.

Croydon Park is situated to the north-west of the city adjacent to the popular suburbs of Croydon and West Croydon. It provides a more affordable alternative to these areas and is also adjacent the Torrens to Torrens roadway which is currently under construction. This will further improve access to the north and south of the city.

Real estate agents continue to report high levels of interest in the $500,000 to $800,000 price range within proximity of the city. Given decreasing supply of properties at this price level, demand will continue to be strong.

Depending on location and general property features which tend to vary greatly, an expected rental yield for properties at this price level would be around 4% to 5%.

Croydon Park
Croydon Park has continued to perform well for purchasers seeking detached housing for around $500,000. The current median price for detached houses is $455,000 (source: realestate.com.au) which has increased since the same time last year when it was $409,000.

Below is a 4-bedroom, 2-bathroom newly built dwelling currently listed on the market in Croydon Park. It offers a low maintenance opportunity on a courtyard style block. The current asking price is $499,000 to $519,000.

SA1

Largs North
In Largs North there has been less movement with the current median price at $438,000 which is up from $416,000 last year (source: realestate.com.au). This area is a further nine kilometres away from the city than Croydon Park.

Modbury
The median price for detached housing in Modbury has remained the same as this time last year at $365,000 (source: realestate.com.au) which indicates it is still an option for purchasers seeking detached housing at a more affordable price level.

Below is a property listed for sale in Modbury for $340,000 to $360,000. This property is a circa 2001 built 3-bedroom, 2-bathroom dwelling which offers an affordable opportunity to purchase within this market.

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St Marys
St Marys has also remained relatively the same with only a small increase in the median price from $430,000 to $432,000 (source: realestate.com.au). There is currently limited supply of detached housing on the market in St. Marys.

These suburbs from last year indicate the impact on location in the Adelaide market. Croydon Park which is situated the closest to the CBD has performed the best out of the suburbs listed.

As noted at the same time last year, the West development at West Lakes is further underway. Although roads have been constructed in parts of the development, it is still a work in progress. Construction of townhouses and a number of apartment buildings is currently underway. We understand that AAMI stadium will be demolished in the coming months which will change the landscape in this area. Construction of the Torrens to Torrens roadway and the Darlington Road upgrade continues to progress with commuters in these areas looking forward to completion of these works to improve their commutes.

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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.