SA Elizabeth Property 2019

Andy Pandy - you sound like you have a dire need to convince yourself that what you've done is the right thing. I actually live in Adelaide and I can assure you things are not going to change in our northern suburbs any time soon - and the problem is the government itself. The government is the only source of income for many of these people and in many cases the only source of jobs or income outside of low-wage service industry jobs.

You admitted that your very business model is itself reliant directly on the largess of the government - but in every sense that is completely unsustainable. Every single project that you have named in that City of Playford press release is about all levels of government spending as much as they can to try and paper over the cracks of some pretty diabolical and increasing poverty out there - not one mention of any major private sector investment, not a single new private sector enterprise or major employer setting up shop out there.

What's happening in Elizabeth is a microcosm indicative of what is going on all over our nation - Keynesian-style government spending accounting for four-fifths of the growth in our GDP, the highest-spending highest taxing government we've ever had in history. Nearly all of the growth in employment and wages is happening in government-funded jobs like NDIS, health and education etc. No organic private sector growth whatsoever - in fact wages would be falling well behind our very anaemic inflation rate if it wasn't for the huge growth in government spending.

In a high unemployment, low-wage and low-inflation environment its incredibly unlikely that your Centrelink dependent clients are either going to get jobs that enable them to pay more rent OR be able to bid the prices of their local houses up - you've obviously got half a brain, you must know that. It's fine if you are positively geared and are actually making money from the rents but you're truly delusional if you think rents or house prices are going to rise any time soon - probably not for at least another decade or more given the fact that we're headed for a Zero Interest Rate Policy (ZIRP) currently or perhaps even negative interest rates soon.

 

Is there high unemployment in the Elizabeths? Absolutely! But is it close to 100%? No, not at all. It's less than 15% for Playford and maybe around 20% for the worse areas. That still means that 80% of the participants are employed. Most likely not in well paying jobs, but jobs nevertheless.
My hope is that to get out of the recession facing us, the government will increase the minimum wage fairly substantially (10%+). If this was to happen, this would likely see rents in low socio economic areas such as Elizabeth increase. This would also bypass any local government.

 

Do you seriously think a Liberal government is going to increase the minimum wage in Australia? If anything they're looking for more ways for the private sector to pay employees less - only yesterday the up-and-coming Member for Goldstein Tim Wilson was writing in the Australian Financial Review about the need for more 'flexibility', the abolition of unfair dismissal laws and his desire to replace awards with enterprise bargaining. All this is going to put further downward pressure on wages, particularly in the sorts of industries that the working class now rely on like retail and hospitality.

 

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Driver does burnout at OTR petrol station at Davoren Park

just another day in Elizabeth and its surrounds !

 

There is alot of what you post that I may differ in opinion, but this is spot on. We have an economy heading for the cliff via lack of demand and and a goverment with it's foot on the accelerator. They are willing to crash the economy then admit their stale ideology is what's currently dragging us down.

 

The lack of demand is due to decreasing job quality, an inevitable consequence of the Thatcherite agenda pursued by Hawke and Keating 30+ years ago - there's nothing we can do about it now other than watch the urban blight take hold across the nation. The state of the housing market is incidental but crashing wages just don't make for good tenants nor good capital growth.

 

Retail sales in South Australia fall the most in the nation - 0.5% https://www.smh.com.au/business/the...-tumble-despite-tax-cuts-20190903-p52nfk.html

Sales were down in almost every state and territory, led by South Australia and the ACT where they dropped 0.5 per cent. NSW and Victoria both fell 0.1 per cent in seasonally adjusted terms. Only Western Australia and the Northern Territory bucked the national trend.

The Asia-Pacific economist for the Indeed job website, Callam Pickering, said annual retail spending in NSW was now at its slowest in eight years.

"Spending growth remains weak for clothing and footwear, household goods and in department stores. Even eating out took a dive in July," he said. "Households appear to be tightening their belts and limiting discretionary spending. That's precisely what you'd expect in an economic downturn."

We're already in a per-capita income recession, it just hasn't translated to GDP figures yet. The fact that nobody is spending money in South Australia isn't news; it's a reflection of our nation-beating unemployment and extremely poor capital expenditure figures.

 

Greetings. I live in Adelaide, but am originally from Auckland. My Outlook short and long term is somewhat influenced by the massive hike in real estate prices in the past five years especially. Reading through your comments on the Elizabeth area, I'm not as fazed by it's current zero private and commercial investment. Several NZ provincial towns of like size and demographic to Elizabeth have transformed into revenue creating hubs for the creative industries. I'm talking Film Production and Post Production, Arts Centres and the tourism off the backs of those industries. As I understand it, the idea of Government investment is to encourage private Enterprise. If that's not happening then Council needs to change tack.

 

SA.GOV.AU - Median house sales by quarter

I wouldn't call a 15-20% rise in 5 years to be a massive hike at all

 

Well above inflation though, so not terrible.
Personally, I'd be very happy if that was an indicator of future growth rates.

 

Interesting discussions .... in terms of Adelaide and similarities to other cities i can see areas of adelaide that are cheaper but not miles out like the elizabeth areas. Many moons ago Adelaide was a town similar to perth and bris, but hasn't had any population growth. Putting aside fables like the (Murray) river water being polluted by Vics (ie. water problems) and false ideas about the adelaide hills kinda constraining the place there is a question to be asked about why adelaide seems to contract rather than grow. It reminds me of regional towns where the youth leave to find work.
Anyway back to the point. There are many inexpensive areas that are not as far from the rest of adelaide that probably would need to 'boom' before Elizabeth is less fringe and more mainstream. Will the defence industries help? I don't think people in defence industries are interested in the Elizabeth areas .....
Will anything help? Well at least there is affordable housing - many parts of Australia are struggling with that.
Maybe Adelaide should do what it did in the past and have a drive on immigration - poms, europeans, asians, africans, indians. They did it in the 50s 60s 70s, maybe it is time to have some real diversity and open Adelaide up to all and sundry. Then Elizabeth can boom.

 

In what areas in Adelaide that are closer to the CBD (if you can call it that) than Elizabeth, are you able to buy a free standing house on a 600sqm block for under $150k?

 

Yes absolutely!

But that 15% growth could represent the boom as well

 

I agree with this. There is certainly some similarity to some of the large regional centres in NZs North Island that are now thriving hubs.

 

You obviously haven't been to Adelaide's north, it's about as multicultural as it comes now-days.

I return to my original point which is JOBS. There are none. As you rightly point out, the defence industry doesn't want to employ locals, they want people who are highly specialised and qualified that probably need to be moved from interstate or overseas. You're advocating for "affordable housing" as a means of attracting people - more unemployed? Last thing that place needs.

When Elizabeth was first established it was primarily a manufacturing and industrial area - now that's all gone the only work left is hospitality or retail and those jobs are low-skill low-pay. Unless that situation turns around (somehow) then there'll never be any growth in rents/capital.

 

@Ben Chifley just to clarify, so you're saying not to invest in Playford or Adelaide?

 

NO not all - but as with every other capital city the desirable areas are where you should park your money. Don't believe stories about 'immanent gentrification complete with chai tea bars and yoga studios', it just ain't happening here. The headline rental returns in the fringe/high unemployment areas are high for a reason; the locals are really quite poor and if anything that situation is getting worse as time goes by with the continued evaporation of private sector employers.

 

Lots of arson around Elizabeth/Munno Para/Salisbury again recently -

Nine News said tonight that a house fire in Elizabeth North last night was being treated as very suspicious - one side of a vacant duplex was attacked by an arsonist and then hours later (presto!) the other side was also very convincingly burnt down. Hmm!

I know that there's some people pretty keen to subvert council process but deary me!

 

On a more positive note out north:

https://amp.weeklytimesnow.com.au/r...1/news-story/896a453f64770e7ea0fed34edcaf30b4

“Northern Adelaide is expected to remain robust despite slow gains in recent years because it has the best fundamentals compared with surrounding regions. Nearly 50 per cent of Adelaide’s total population gain in 2016 to 2017 was in Adelaide’s north.