SA First Home Buyer PPOR Adelaide

Hey all,

Currently in Sydney but getting ready for a move to Adelaide. Love the city from my previous vists (a lot to do with being an avid cyclist) and it's so much more affordable than Sydney. Illbe going with my partner and we will be looking to start a family in the next couple years.

I've only really got first hand experience with the cbd so looking the advice on what suburbs to look out for.

We will probably rent for twelve months to increase our deposit and get a better feel for the area but I'm still keen for any tips.

We are keen on the idea of a new build under 575k to take advantage of FHOG, but I get the feeling the new builds/house and land packages aren't too popular in this forum?

I'm currently thinking the North Eastern suburbs like Klemzig/Paradise etc. Any comments on these? I've never actually seen them first hand

 

Hi Bluejay,
You can search Klemzig, Paradise and Campbelltown imo. Find a house near to O-bahn interchanges which help convenient transportation and easy access to the cycling trail

 

Do you understand peoples issues with house and land, and why you are comfortable with it other than its all shiny and new?

 

Well to take advantage of the the FHOG it needs to be new. Another pro is the warranty it comes with, as per dwellings would seem to be more likely to run into problems that require repairs/renovations.

The drawbacks seem to be potential uncertainty during construction and cost blowouts. Also waiting so long before you can move in and therfore having to rent elsewhere. The small land parcels of land and being in a neighbourhood where all the houses are identical. Also aware of rapid depreciation and minimal prospects of growth given the release of new dwellings (but shouldn't really matter if its our PPOR).

Am I on the right track? Just curious if it's always an out and out bad idea, or some people do have good experiences? Coming from Sydney, they do look quite attractive for nice looking new homes around the 500k mark and not all that far out from cbd.

 

Thanks! The Obahn and trail definitely have attracted me to those areas. From what I've heard the demographics of those areas aren't too bad either, and are fairly family friendly?

Any other parts of the city worth a look?

 

The biggest ones would be cost (high), small land and lack of scarcity including future supply.

Comparing adelaide ‘value’ to sydney is crazy. They are not the same size cities.

In theory, value doesnt matter as much if ppor, but what are you going to retire on?

 

Yes you're right, I should be comparing apples with apples. But the older houses in adelaide in the same suburbs don't look like much less, but I may be underestimating added costs of the new builds.

Wouldn't lack of scarcity also affect the older builds too?

The new buildings in the North East of adelaide don't seem to be like the massive green field developments in North Western Sydney, but seem nestled among more traditional established suburbs... But I haven't actually been to these suburbs yet so not really sure how thru look and feel.

 

Not sure what style of dwelling you're looking for.
6A, 6B, 6C Sycamore Terrace, Campbelltown, SA 5074
Something like this would likely tick a lot of boxes.

 

Yep, very nice. Looks quite nice and from Google Street View the street at least has some character and not all houses identical. Very close to cbd and park too.

Only issue would be we also have a dog that would prefer a bigger backyard.. also with maybe kids coming along.

That example is an already build new house, so you just buy the house rather than a house/land package? Is that generally a better way of doing things? Any disadvantage besides not being able to customize etc? Probably harder to find brand new already build home vs land /house package?

 

A House and Land package's advertised price is NOT A TRUE INDICATION of the actual final amount you'll need to spend to build and finish off a project.

First time builders should be cautious, these marketing campains in most cases grossly under-quote the real cost, but if you are really set on picking your own colors then look for house and land packages marketed as "TURN KEY, FIXED PRICE CONTRACT". Then compare that price with what an already completed project of the same size/quality in the same suburb is selling for (I honestly think you'll find the price is exactly the same).

 

Thanks for the information! Sounds like Turn Key is the way to go, or an already completed but new house (to get the grant).

There seems to be a lot of new ones around the Klemzig area like this:

Lot Num 53. Cullford Avenue, Klemzig SA 5087 - Off The Plan House For Sale | Domain

Thoughts?

 

This is not a "Turn Key/ Fixed price" house and land package! The add states "builder can easily change the floor plan, inclusions and façade, allowing you to fully customise your new home to suit your lifestyle needs and requirements"

1. this means that the council has NOT approved construction of this design for this allotment.
2. so this advertised package is just an 'idea' of what would likely fit on the block (and likely be approved by council).
3. the correct price to build this design can NOT be ascertained until the design is approved by council and then fully ENGINEERED (usually takes 6mths).
5. untill soil samples are tested, engineering is completed, footings confirmed, and all the final selections are made the price can (and will!) go up.
6. heaps of things are NOT included on this ad- perimiter footpaths, driveway, stormwater pipes to the street, lawn, fencing, retaining (if needed), rainwatertank.....

 

Yep as soon as you make any alterations you'll be paying a higher price

 

Lets take the most recent vacant allotment in Klemzig sold (396m sq block) for example, it cost $351,000, now add 18mths holding costs to get council approval and have it constructed (lets say+$25,000 worth of interest spent), add on 18mths that you'll have to pay to continue to rent (unless you live with mum and dad still) until your new build is complete (lets say $300 per week, so thats +$22,500), now calculate how much to build to a low level finish- think 2.4m high ceilings, plain face bricks only, laminate benchtops, cheap appliances, minimal tiling to the wet areas etc, at $1,200 per square meter. Or to a medium level finish - think 2.7m ceiling heights, a rendered portico to the front, floor to ceiling tiles, stone benchtops, nicer applances etc calculate at $1,500 per square meter.


$400,000 to buy and hold during construction.
$180,000 to build to a low level finish this 150m/sq house.
or
$225,000 to build a medium level finish 150m/sq house.

$580,000 - 625,000 This is the REAL total cost to buy land and build a house FULL TURN KEY.

Now compare this with how much an already constructed house is selling for...that you could buy and move into strait away...that you can see exactly what you are buying...

 

I 100% agree with @Erica sentiment - have the same discussion with clients every week when they all want to build...
Because they believe they can build the home they want, reality is you can't afford the home you want and will end up building what the builder wants at their price.

 

Great information thank you, I'll look back at this.

Pitt the first home owner grant only applies to new dwellings, that's really the only attraction for me.

 

Remove the FHOG... would you still buy that property?

 

Haven't done enough research to compare to non - new places yet. I'm not stuck up on new if the value isn't there.

 

I would say the value is in the eye of the beholder when it comes to a PPOR.

I can't speak to the North East, but down South around St Marys you can buy a brand new house on 400sqm for $500k or you can buy a ~1950s house on 700sqm+ for the same $.

Do you prefer a modern home or a large block?

 

I would sacrifice some space for a 60 year + newer house for sure. Maybe not if the 50s house was recently renovated though.

I thought the comparison though was with building vs buying something relatively new but already built. Was getting the impression you could save a lot by not building and just buying a newish completed house.