SA Adelaide top of the charts (finally!)

What is all this talk of boom & bust? I invested in Adelaide for boring 4-5% pa long term returns haha

 

Gotta love Adelaide, we don't 'bust', in the past 50 years the biggest reduction in Adelaide metropolitan median house price was -3.5% (the 2010 median vs 2011 median, my data from earlier post).
Edit: actually it was 1979-1980 where inflation was 10.5% but Adelaide metropolitan median house price only went up 6.5% (so real loss of -4%)

 

oops posted a bit quick on that last one, actually the worst performing year (over the past 50yrs) for Adelaide was 1986 when median house price was $73,500, the interest rate was 15.5%, inflation was 9.20% and the median house price only increased 1.50%, so a real return of -7.70%. But I'm sure the readers get my point, compared to Sydney and Melbourne, Adelaide is a less volatile market.

 

You gotta have a boom before you can have a bust.

Do we not think we have a boom? If so Adelaide is at least half way there ......

 

With all the booms around Sydney, I decided to look at Adelaide market ..... Looks like Adelaide is booming too! Even better given that it is from lower cost base .....

Demand for Adelaide homes hits ‘crazy’ levels with buyers desperate to not miss out - realestate.com.au

West Lakes sellers in shock as home sells for ”phenomenal” amount - realestate.com.au

Glenunga International High School zone draws huge crowd to nearby home auction - realestate.com.au

I always thought Adelaide is good value and a great place to downsize when I get old. But looks like it is not as cheap as before!

 

94% clearance rate in Adelaide last weekend auctions. I know auctions are not huge in Adelaide, but still it is high.

Brissy is similar (not a lot of auctions) and clearance rate not as high as Adelaide. Brissy is definitely booming.

Adelaide Real Estate Auction Results - Domain

 

Ok so since you are onto the stats, what have been some of the best performing areas of Adelaide since the mid 1980s? 1986 was leading up to the 87 share market collapse so I imagine a lot of money was going into stocks and not realestate so much.

I love talking to older investors. CGT came in in 1985 which must have had an effect on sentiment as well??

 

the beach.

Inner city only now becoming expensive.

 

I'm looking to list a blank canvas character home in Mile End. Anyone have any on the ground reports of how things are going in that inner west area?

 

Croydon Park Renown Park (5008)area houses going very quickly if they have land (older) and even newer are just selling fast. Can't see enough data on whether high asking prices have translated through yet (need 30 more days for the property i have been tracking).

A recent conversation with an agent was referencing sales in last 6 months rather than recent sales. So i am looking to the next 30 days to see if a spike in asking prices flows through to sale prices.

All signs are positive, the only query was 'has the market accepted the higher prices'?

 

Very low stock. Very hot market.

 

Friends are currently looking in similar area, Torrensville, Mile End etc. Western Suburbs are all selling very fast either before auction or at auction well above listed price.

Went to an auction a 2 weeks ago around the corner in Kidman Park. 2 couples from Melbourne at the end pushed it to $865K. Very similar house 5 doors down sold for $805K which was in much better condition...

 

I attended that auction, great location with oval/playground in your back yard. They probably overpaid, but after going to a few auctions recently in surrounding suburbs I feel that price might just be the new normal. Hopefully not.

 

"Adelaide's housing boom continues with run-down home selling for $750,000 above asking price - ABC News" https://amp-abc-net-au.cdn.ampproje...me-sells-for-$750k-over-asking-price/13210064

"He said there were about 500 people at the auction with nearly 50 registered bidders."

 

If only this was a closed forum, dammit...

What's the land size?

 

What are peoples thoughts on a good area for CG focused investment for 400k or less?
Is it worth trying to find a good deal in the Largs North/Semaphore/Rosewater?

Have had some friends recommending Munno para west/Andrews Farm but not sure if there’s much CG to come out there

 

At the end of the day CG is demand vs supply driven so i am drawn to southern suburbs, Onkaparinga region. Starting to get pretty scarce on land north of Seaford for new housing and its all land locked by hills and sea. still some good suburbs with large allotments for around that 400k price point. Personally i prefer suburbs closer to the beach and larger the block the better for growth potential.

 

How many properties do your friends own? I wouldn’t touch Munno para or Andrew’s farm with a barge pole.
You might just get into rosewater and largs at that price point but I’d say ship has sailed for semaphore.
I’d try north east or south.

 

The ship has sailed with Semaphore but you might be able to find something in Largs/Taperoo/Osborne. The drawback will be that it's going to be west of the railway line/Victoria Road where there is large amounts of social housing. On a map it looks close to the beach but in person when you drive around the area it looks and feels very industrial, as it faces Torrens Island and the Osborne shipyards. The last time I drove around west of Taperoo there were still quite a few attached houses e.g. Yandra Street Taperoo. There has been some renewal but most of it is cheap, low quality, generic developer style e.g. Lowana Terrace Taperoo.

Munno Para West and Andrews Farm may stack up cash flow wise but capital growth wise they won't do very well. Apart from bordering Smithfield and Davoren Park most of the properties are overcapitalised in comparison to the land value (large houses on small blocks). Over time the properties will get older and depreciate but you won't be able to subdivide the land. The next issue related to land is that there's no shortage of land out north. There's been residential land released in Virgina, Angle Vale and all the way out to Gawler, which will continue in the future.

With 400k I would be looking at Pennington and Rosewater out of the suburbs you have listed. Closer to the CBD and many of the houses are old Californian bungalows, which have character and there's actually quite a few wide, tree lined streets. Alberton and Cheltenham used to be working class suburbs with similar housing but as the areas have gentrified the houses have been updated and renovated. As a result people looking for those character homes that don't have the budget start looking into Rosewater/Pennington for value.

 

North-East for me. Modbury and surrounds. Detached house on a subdividable (600sqm+) block.

Great public transport, amenities and services (schools, shops, parks etc).