Join Australia's most dynamic and respected property investment community

SA Inner North/North East Adelaide Suburbs Review

Discussion in 'Where to Buy' started by Corey Batt, 14th May, 2016.

  1. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    1,167
    Location:
    Adelaide, SA
    Part four in our series of area reviews, David and I will cover off on some of the more active inner north/north eastern suburbs which investors may be looking to invest in.

    Area overview

    The inner Northern/North Eastern hub is under three main councils – the Adelaide City Council, Prospect Council and Walkerville Council. With most of these properties being old suburbs of Adelaide, the streets are largely filled with quality character homes on large allotments. Even though they are generally on blocks which are upwards of two times the median block size of Adelaide, the micro councils of inner Adelaide restrict development – so they can maintain the heritage of the area. Concessions have been made along transport corridors such as Prospect Rd and Churchill Rd, where there is a surge in apartment construction.

    These areas fit the middle to upper demographic of Northern Adelaide suburbs, with significant gentrification occurring across many of the main shopping and retail strips.

    Median Prices

    [​IMG]

    Medindie tops the list considering – unsurprising for an locals as this area has some of Adelaide’s largest turn of the century mansions, some sitting on excess of 4000sqm. You’re unlikely to buy a property to rent in this area, but it is important to understand the flow on popularity that these suburbs can have on adjacent areas.

    Devon Park represents the lowest median – a relatively unknown area, it is a small suburb which has old industrial sites which are being decommissioned and townhouses built in the area. Directly adjacent to Prospect, it may well see a rise in popularity as affordability pushes people into the area and the suburb street scape improves.

    Demographics
    [​IMG]
    [​IMG]

    All areas within this review except Devon Park have incomes significantly above the metropolitan median, this is expected with all suburbs being above the metro median house price. Medindie and Walkerville standout with the highest age and household incomes, which also matches with the highest medians in the areas – a clear correlation.

    Why Inner North/North East?
    • One of the most desirable areas of Adelaide
    • Large property sizes above the metro norm as small micro councils refuse development on the character filled streets – fuelling growth through a lack of supply for an increasing buyer pool
    • Large gentrification in progress – with cafes, restaurants, dessert bars, independent fashion retailers
    • Ease of access to both CBD and middle ring North/West/East employment hubs, including substantial public transport infrastructure
    Corey’s Suburb Pick

    Prospect
    [​IMG]
    An average Prospect Bungalow, a common construction style for the area

    Adjacent the CBD and North Adelaide, Prospect represents an established character suburb going through significant uplift as being a ‘trendy’ suburb of the inner North. Prospect Rd is filled with cafes, restaurants and retail – being supported by the Prospect Council to make this a vibrant hub.

    Whilst prices have already risen strongly over the recent years, the comparative value in terms of property size and quality is still lower than its Southern and Easter counterparts. I believe over the long term Prospect will continue its strong growth trend as desirability and lack of supply keeps upwards pressure on prices.

    Corey’s “what do avoid”

    Apartments
    [​IMG]
    Apartments being built in Prospect Council utilising the relaxed development plan for high density construction on main transport corridors


    With the rezoning along the transport corridors in the Prospect Council, there has been an exponential surge in apartment development in the area. This ongoing supply will have difficulty in selling in an area where there isn’t strong demand. CBRE has noted in a recent Adelaide property summary that developments along these corridors have as much as 25% of stock failing to sell in the last year alone, with this year’s stock levels to exacerbate the issue.
     
    Perthguy, Cactus, Matthe_w and 4 others like this.
  2. D.T.

    D.T. Adelaide Property Manager Business Member

    Joined:
    13th Jun, 2015
    Posts:
    5,589
    Location:
    Adelaide, SA
    Adelaide Inner North

    While the inner north suburbs of Adelaide are not quite as prestigious as the inner east or inner south, over the past 5-10 years it has become a very desirable place to live for both owner occupiers and tenants alike.

    [​IMG]

    The vacancy rates match the national averages in this area with good results coming from the more traditional owner occupier filled areas. The main exception being North Adelaide which (combined with its Rent : OO ratio you’ll see shortly) has reached over supplied status.

    [​IMG]

    As you can see this region has a very health owner occupied housing pool. This is great for the demographics and stability of the area, hence the capital growth prospects. This does mean poor yields though. Devon Park’s is outside of the acceptable norm, yet still has low vacancy rate so could be sustainable.

    Typical rents in the area

    I’ve graphed the typical rents in the area, but unlike previous write ups have separated houses and units but you’ll notice that there are no statistics available for units in a couple of the suburbs as these areas are made up of predominantly houses.

    [​IMG]

    What are each of these suburbs like?

    North Adelaide – One of Adelaide’s favourite spots for vibrant pubs, restaurants, cafes and shopping. Lots of gorgeous character period homes.

    Medindie – Primo owner occupier residential area with an executive demographic. Very few tenants.

    Prospect – Blue chip suburb that everyone seems to want to live in. Has turn of the century homes with leafy tree lined streets. Prospect Rd which runs up the middle is the main café strip of the region.

    Nailsworth – Flew under the radar in Prospect’s shadow until recent times when its price tag caught up to that of Prospect.

    Broadview – Previously a state housing area, but due to its proximity to the city and the removal of state housing, is now starting to lift as an area.

    Sefton Park – Dotted with bungalow type properties, whose values haven’t caught up to neighbouring Prospect and Nailsworth yet.

    Devon Park – Less desirable due to being adjacent the train line and light industrial area, but its proximity to the city will help hold its value.

    Collinswood – A level down from neighbouring Medindie and Walkerville

    Vale Park – A small, affordable suburb (relative to its neighbours), as mostly comprises houses from the 1950’s.

    Walkerville– Large estate style homes with tennis courts out the back.

    Dave’s Suburb Pick:

    Sefton Park

    Sefton Park is a bit of a sleeper suburb. It’s quite affordable and adjacent to suburbs that are much more expensive. Capital growth could be expected here.

    It is next to 2 major shopping precincts and well known private schools.

    As seen in the graphs above, its vacancy rate and owner occupied ratio are well within acceptable bounds for investing in. At time of writing, there are only 3 properties available for rent in the area which is a good demand signal.

    [​IMG]
    A property in Prospect that we manage

    Dave’s “what to avoid”

    Apartments. As seen with the statistical numbers presented in North Adelaide, they create a supply problem for tenants in the area. Even more are being built in the region but I’d advise staying clear of them if you want to be able to lease them in a timely fashion.
     
    Last edited: 14th May, 2016
    Cactus, Matthe_w, Adam W and 3 others like this.
  3. norwoodman

    norwoodman Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    262
    Location:
    Brisbane, QLD
    For some of those longer larger suburbs such as Prospect and Broadview, do you guys notice much difference in those markets from one end of the suburb to the other - northern end versus southern end?
     
  4. D.T.

    D.T. Adelaide Property Manager Business Member

    Joined:
    13th Jun, 2015
    Posts:
    5,589
    Location:
    Adelaide, SA
    Prospect definitely, most notably north and south side of Regency Rd, but also as ya get closer to the city the properties get nicer and the price tags get higher.
     
  5. DaveM

    DaveM Adelaide Buyers Agent & KFC Strategist Business Member

    Joined:
    14th Jun, 2015
    Posts:
    2,106
    Location:
    Sydney & Adelaide
    Very much so.. I live in Medindie and across Nottage Tce is Medindie Gardens... where you immediately drop 300k-500k in purchase price purely because of suburb name.

    As DT said above, Prospect is one suburb split by Regency Road where north is considered the "poor mans prospect". Western parts of Prospect are also undesirable near the train line regardless of north or south of Regency.
     
  6. Bigmaan

    Bigmaan Active Member

    Joined:
    19th Jun, 2015
    Posts:
    26
    Location:
    Sydney
    Nice reports Corey & Dave.

    I have a DHA property in Springbank Waters Estate in BURTON in the north. Quite liked the set up and quality of that estate. Held it for 6 years and whilst it is not a Sydney market gang buster it going ahead each year.

    Burton never gets a mention, too close to Elizabeth etc I think. My next next one will be Adelaide again.
     
  7. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    1,167
    Location:
    Adelaide, SA
    There is indeed huge differences based on the section of the suburb.

    Generally north of Regency Rd is 100k+ lower in price than Prospect proper. Likewise North and west of Prospect Primary is generally the lower priced sections of the western half of Prospect.

    Likewise in Broadview North of Regency is lower in price with a lot of older ex housing trust properties. Galway Avenue along Broadview has extremely above average medians, with some houses selling for $1mil+.
     
    Perthguy likes this.
  8. ADLInvestor

    ADLInvestor Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    98
    Location:
    Adelaide
    Shame, we're about 2 suburbs worth too far out with our IP being in Pooraka. Seems to be a fair bit happening around us, with the houses south of Montague Rd being demolished and split in 2/3 blocks.

    Just have to keep holding on for now, and hope we start to see some increase!
     
  9. D.T.

    D.T. Adelaide Property Manager Business Member

    Joined:
    13th Jun, 2015
    Posts:
    5,589
    Location:
    Adelaide, SA
    Hey mate,
    Pooraka was covered in an earlier edition of our reports - SA - Salisbury LGA Summary
     
  10. ADLInvestor

    ADLInvestor Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    98
    Location:
    Adelaide
    @D.T. legendary! Must have missed that!

    PS, i'll be in touch with you soon.. Things have finally settled down ;)
     
    D.T. likes this.
  11. nothingman

    nothingman Active Member

    Joined:
    24th Feb, 2016
    Posts:
    32
    Location:
    Sydney
    nice report. Another +1 for Prospect is that it has fibre to the premises NBN installed, one of the few suburbs within 12kms of Adelaide that does
     
  12. Matthe_w

    Matthe_w Active Member

    Joined:
    19th Jun, 2015
    Posts:
    40
    Location:
    Adelaide
    Prospect is a great area my partner and I have lived here now for about 18 months and really enjoy the lifestyle and ease of access to the city, beaches and north it offers.

    There is a lot of development and gentrification going on in the area as already mentioned. The council is allowing some of the larger blocks 800m2 + to be subdivide. With the blocks selling for around the 450k mark and they are snapped up very quickly. Construction has recently begun on a new cinema on prospect road in the heart of the café strip.

    The council appears to be very progressive as well (something unusual for Adelaide IMHO) getting on board with social media and developing apps for residents in the area to access various services and information. They are also heavily into developing a community spirit in the area holding festivals, concerts, farmers markets and other such events through out the year.

    I believe this has all lead to the ever increasing house price in the area as demand for this lifestyle continues to increase.
     
    Perthguy and D.T. like this.
  13. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    1,167
    Location:
    Adelaide, SA
  14. Roshy

    Roshy Member

    Joined:
    12th Jul, 2015
    Posts:
    22
    Location:
    Victoria
    Thank you for the great analysis of Prospect!

    Yes, there appears to be strong demand in the area, but can you explain how restrictive supply is? I had a look at the actual / proposed subdivision stats and it appears that there may potentially be a lot of dwellings in the pipeline.

    It will be great if I am able to tease out your expertise of the area.

    Cheers!
     
  15. DaveM

    DaveM Adelaide Buyers Agent & KFC Strategist Business Member

    Joined:
    14th Jun, 2015
    Posts:
    2,106
    Location:
    Sydney & Adelaide
    The lot and frontage requirements vary suburb to suburb... Prospect is very strict, others surrounding such as Nailsworth and Sefton Park are a bit less restrictive. Coupled with streetscape and frontage overlays, Prospect central is having not a tonne of subdivision ongoing except the urban corridor zoned areas
     
    Roshy likes this.
  16. D.T.

    D.T. Adelaide Property Manager Business Member

    Joined:
    13th Jun, 2015
    Posts:
    5,589
    Location:
    Adelaide, SA
    In addition to DaveMs expert comments, Churchill Rd (and a couple others) have been rezoned urban corridor. This means houses are bring torn down and replaced with multistory apartments.

    Use this to your advantage - house demand is same or increasing, house supply is reducing, therefore house prices likely to rise.
     
    Roshy likes this.
  17. Roshy

    Roshy Member

    Joined:
    12th Jul, 2015
    Posts:
    22
    Location:
    Victoria
    Thanks DaveM and D.T. for your valuable insight.

    The statement above was based on the number of subdivision applications that were approved in Prospect LGA (sa.gov.au - Land supply monitoring). I am trying to interpret the stats in a meaningful way. Am I right to conclude that most of the subdivisions are from urban corridor and Nailsworth/Sefton Park?

    Cheers