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SA Eastern Suburb Adelaide Review

Discussion in 'Where to Buy' started by Corey Batt, 4th Oct, 2016.

  1. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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    Part five in our series of area reviews, David and I will cover off on some of the more active eastern suburb locations which investors may be looking to invest in.

    Area Overview

    The inner east, generally regarded as the most affluent ‘old money’ area of Adelaide, is a well-established group of micro suburbs stuck between the CBD to the west, and the Adelaide Hills to the east. The inner east was developed from the point of establishment of Adelaide, up until the 60’s/70’s on it’s outer fringe where it’s hit the geographic boundary of the Adelaide Hills, and the established North Eastern/Southern Eastern areas. The areas architecture reflects this, with the most CBD adjacent properties largely 1800’s/early 1900’s stone fronted villas, flowing into bungalows and art deco double brick residences in the middle suburbs, finally ending with austerity style and ex-housing trust stock.

    With the continual gentrification of the East, especially the outer sections, there has been a progressive redevelopment of non-character stock into subdivisions, townhouses and apartments in arterial areas.

    The Eastern suburbs development and commercial ring along the city has national presence from various corporates, particularly in Medical, Banking, Accounting etc (and also the office for Precision Funding :))

    Median Prices

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    Demographics

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    As expected, median household incomes are above the mortgage belt outer suburbs in the Eastern suburbs. Median ages vary in a range of up to 20%, but no significant trends correlating between median house prices and age. I would suggest a part of this is that some sections of the East with higher medians also have significant old stock in apartments, which would be providing affordable rental stock for younger renters.

    Why East?
    A few of the reasons why an investor may consider the eastern suburbs:
    • Considered the most blue chip section of Adelaide, whilst representing significantly lower medians than Eastern state alternatives
    • Tree lined, character home filled streets with strong gentrification potential in the mid to outer sections of the East
    • Defined boundaries restricting the ability for urban expansion or new land supply coming onto the market, creating a steady limited supply of property, compared to increasing demand from property buyers
    Corey’s Suburb Pick

    Beulah Park
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    Renovated symmetrical cottage in Beulah Park


    A micro suburb, Beulah Park is sandwiched between the highest median suburbs and the more affordable areas to the east. As a suburb you can secure a character home whilst at a discount to the inner most ring suburbs. This area provides an investment play which can attempt to ride off demand from those being priced out of the most expensive suburbs, providing an alternative which feeds off the same amenity and services of the shopping precincts, schools and public facilities.

    Beulah Park is still considered as relatively ‘undiscovered’ for name recognition, as prices continue to rise this will assist in raising the profile of the area as an alternative for those looking for inner eastern style living.

    Public transport is limited to buses on roads which gain heavy congestion, so good parking on the property is important to appealing to any renters. Yields still are well below the cost of ownership, so much like all of the suburbs noted you will be reliant on a growth strategy than cash flow.

    Investment strategies which might suit the area: renovations, buy and hold gentrification play, development, long term growth strategy

    Corey’s “what to avoid”

    Apartments – particularly old stock.

    Scattered through the suburbs are 60’s/70’s apartment blocks, with 1-2 bedroom small internal square meter apartments. Overall drivers for this type of low income housing doesn’t fit well with demographics of the area, detracting from the primary driver for the eastern suburbs: quality character living. Whilst there is not an active push by local council to release further apartment stock, this represents a future risk which can further temper prices compared to the deeply constrained supply of housing stock available in the eastern suburbs. Yields continue to remain low even for apartments, diluting the alternative of it being a potential yield strategy.
     
    Last edited: 4th Oct, 2016
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  2. D.T.

    D.T. Adelaide Property Manager Business Member

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    Adelaide Eastern Suburbs


    The prestigious eastern suburbs of Adelaide provide plenty of capital growth opportunities for investors, both in the short and long terms. It is quite a desirable place to live for both owner occupiers and tenants alike.

    Well established, character-filled, tree lined streets dominate the region as well as highly sought after schools. In such a blue chip region, don’t expect to get much rental yield.

    One of the disadvantages of the region is the lack of public transport services present. Given the wealth in the area, I doubt this is a concern. It does make some of the main roads busy for commuters though. There has been plans of extending the city tram to the eastern suburbs but these have received no funding yet.

    As discussed in previous area reviews, vacancy rate and owner occupier ratios combine to tell a story of how over or under supplied an area is and thus whether worth investing in. The eastern suburbs of Adelaide are predominantly owner occupied and low vacancy, allowing investor activity if you can afford the price tags. The exception being units in Norwood which are very over supplied – unfortunately the figures available online doesn’t separate dwelling types.


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    Median rents in the area

    I’ve graphed the median rents in the area, separating houses and units which as you can see are quite disparate.

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    School zones

    Driving families to the area is the strong desire to be in one of the top schools in Adelaide. There are 3 main ones in this area – Glenunga International High School, Marryatville High School and Norwood Morialta High school. There are several well performing private schools in the area as well.


    Glenunga International High School zone map - https://www.decd.sa.gov.au/sites/g/files/net691/f/glenunga_international_high_school_zone_map.pdf

    Marryatville High School zone map - https://www.decd.sa.gov.au/sites/g/files/net691/f/marryatville_high_school_zone_map.pdf

    Norwood Morialta High School zone map - https://www.decd.sa.gov.au/sites/g/files/net691/f/norwood_morialta_high_school_zone_map.pdf


    A little about each of the suburbs:

    Norwood – Closest to the CBD of all suburbs in this review, its home of the trendiest café strip in all of Adelaide “The Parade”. It has many trendy cafes, restaurants and local businesses.

    Magill – Has a University campus and the aforementioned Norwood Morialta High School

    Tranmere –Has an interesting demographic – the old houses here are predominantly Italian who have been there for decades and the newly built townhouses rapidly popping up to replace them are mostly Asian families.

    Rostrevor – At the foothills (part of the suburb even comes under Adelaide Hills Council). Grand 2 storey homes are quite common.

    Burnside – Also foothills, some properties get exquisite views of Adelaide from here. Has the Burnside Village, which is a prestigious shopping centre home of many high end fashion labels.

    Glenunga – Known mostly for its school, which is one of the most sought after in South Australia.

    Kensington Park – Along with Kensington Gardens is very well regarded, famous cricketer Sir Donald Bradman lived here.

    Firle – Has the only Kmart of the eastern suburbs. Not as well regarded as the other suburbs in this list as reflected by the lower rental figures and higher rental population.

    Beulah Park – Avoid the main roads that border this area! Within has nice character homes at affordable prices to get you close to the action without being on top of it.

    Maylands – Well established area with nice homes. Has good potential being as its next to Adelaide’s highest price suburb at St Peters.


    Dave’s Suburb Pick:

    Tranmere –

    The well-priced old homes are providing plenty of opportunity for both renovation and development.

    Local vernacular refers to the better part of the suburb as Poets Corner, where a few streets have famous poet names and are generally better regarded and appearing streets. Refer to the Campbelltown City Council website as to what is possible here. The Poets Corner section has slightly stricter zoning than the rest of the suburb.


    Dave’s “what to avoid”

    Units in Norwood.

    There’s far too many of them and are quite over supplied and difficult to let. Additionally, majority of them were built in the 60’s prior to planning laws and as a result are now seeing the maintenance issues pile up.
     
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  3. Ardi

    Ardi Well-Known Member

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    Great information as always lads!
     
  4. DaveM

    DaveM Adelaide Buyers Agent & KFC Strategist Business Member

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    Yes you need to be very careful of poets corner.. its the most expensive area of Tranmere and also the most development restrictive. It has its own policy area with large lot size minimums, and even when you can subdivide you generally need to make it look like a single dwelling ie stepped frontages with only 1 front door, second dwelling to be accessed from side.

    Also of interest is mixed use zoning on Glynburn Rd, where you can use resi backed security as commercial premises.

    Campbelltown council is also one of the few (if only) council which insist on SAPN statutory easements being registered on title.
     
  5. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    Beulah Park
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    Renovated symmetrical cottage in Beulah Park


    She's a beauty!
     
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  6. MTR

    MTR Well-Known Member Premium Member

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    great info, I am interested only in what is happening today ..can you provide info on this:)
     
    Last edited: 12th Oct, 2016
  7. Nemo30

    Nemo30 Well-Known Member

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    As with anything, best to do your own research. It's great that you are interested in Adelaide. Great city.
     
  8. MTR

    MTR Well-Known Member Premium Member

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    Thanks, unless This area is rising won't be interested hence my question
     
    Last edited: 13th Oct, 2016
  9. DaveM

    DaveM Adelaide Buyers Agent & KFC Strategist Business Member

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    I dont think anything too drastic has happened in the 8 days since this was posted so its pretty current :)
     
  10. Waldo

    Waldo Well-Known Member

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    I think people are just trying to teach other people how to fish, rather than catching the fish for them :)
     
    Last edited: 12th Oct, 2016
  11. DaveM

    DaveM Adelaide Buyers Agent & KFC Strategist Business Member

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    Happy to answer any specifics.. adelaide is markets within markets same as perth, melbourne etc. Some up some down some flat.

    Eastern suburbs are generally undergoing ripple effect, as those closer to primo areas such as Norwood get priced out, they move out and out. Only so far before you hit the hills face and so the furthest extremities get priced up eg Rostrevor. South east is already expensive so where to next... north east is the logical bet
     
  12. MTR

    MTR Well-Known Member Premium Member

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    It's a property forum and we are here to learn, asking relevant questions is appropriate and as you say.. teaching people how to fish, there are many newbies on PC who don't know what they should be asking, hence my question.



    MTR
     
    Last edited: 13th Oct, 2016
  13. Nemo30

    Nemo30 Well-Known Member

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    Corey and Dave have provided some excellent information from which people may extend and do their own research if they are geniunely interested in these areas. Thank you both for providing the forum with such detailed and useful information, not only in this post, but your other similar posts.

    I, and other's, appreciate the effort you have put in. I also enjoyed the podcast the other night.
     
  14. MTR

    MTR Well-Known Member Premium Member

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    Not sure why you need to justify?
    There are many members on this forum who provide help and lots of free information
    I just asked a pretty basic question, just ignore my post if it bothers you.






    mtr
     
    Last edited: 13th Oct, 2016
  15. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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    Which market MTR? Eastern suburbs?

    Like most have been posting in the various Adelaide threads, up 15-20% over the last 2 years. Adelaide metro as a whole is up 6.5% over the last 12 months:

    [​IMG]
     
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  16. MTR

    MTR Well-Known Member Premium Member

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    Corey
    I was asking about Beulah Park as per your thread

    I understand why you like it, but what's happening in current market today, is it moving. What is the attraction today! strategy today

    I have asked similar questions on Brissy thread...so hopefully PC members on This thread will stop being defensive and just answer questions so we can all learn

    Yields etc
     
    Last edited: 13th Oct, 2016
  17. jeff3002

    jeff3002 Member

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    Thanks for the info guys, always very helpful and I appreciate the time you put in!

    You mention avoiding units, especially 60's style units (which I tend to agree) but what about townhouses? For example, early 90's dwellings like the below. I imagine these would be easier to rent out than the old yellow brick units, but is there still an oversupply issue here limiting rental return and CG? Thanks :)

    1/75 Beulah Road Norwood SA 5067 - Townhouse for Sale #123823994 - realestate.com.au
     
  18. D.T.

    D.T. Adelaide Property Manager Business Member

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    Thanks Jeff
    Yeah you would probably do ok with something like that. That end of Beulah Rd looks ok, it's not over populated (mostly character houses along there). It's more or less a duplex rather than a unit/townhouse. That'd rent ok :)

    Problem mentioned was mostly with units, as there's millions of them in the area and no real way of differentiating yourself to attract a buyer/tenant. Other issue is that most of them are 60's style ones that are starting to have maintenance issues.
     
  19. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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    That's a good potential option Jeff.

    Definitely agree with the comments David has made, it's something we see quite often. If you own a property which isn't having to compete on price (in terms of either value or rental return) and enjoys a relative scarcity factor, valuations will come back more consistently stronger than properties which have a huge number of comparables which have to lower their prices to secure tenants or sell.

    The eastern suburbs never allowed a lot of townhouses to be built and with the huge amount of high value character homes its unlikely this will change - outside of areas like the Glenside re-development. With this in mind, so long as the strata fees are within a healthy range it can make TH's a reasonable potential investment.
     
  20. jeff3002

    jeff3002 Member

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    Good advice as usual DT & Corey. I think I'm still leaning towards trying to find free standing house on the West side for CG, although these townhouses in Norwood are a very tempting low maintenance option! I still waiver between which is the best option for my partner and I ;)
     
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