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SA Inner Western Suburbs Adelaide

Discussion in 'Where to Buy' started by Corey Batt, 3rd May, 2016.

  1. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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

    Area Overview

    Under the City of West Torrens and City of Charles Sturt, the inner western suburbs traditionally were view as working class areas with lower than average incomes, significant community housing and limited infrastructure. Over time however the area has grown in desirability, now with an ongoing increase in demand, especially inner ring character houses which are still below the medians of any other North, East or Southern suburb. New retail and hospitality has emerged, from small independent stores to big box retail including Adelaide’s only Ikea.

    Median Prices

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    Demographics

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    Overall, median household income across the suburbs is fairly level, with Brompton, Lockleys and Mile End being the highest for the region, and Seaton the lowest. Seaton’s figure in particular would be influenced by significant older unit stock providing low cost rental accommodation.
    The average ages provides a significant variance in two examples: Fulham and Mile End. Fulham represents a median age substantially above the metro average (38.8 years), likewise Mile End shows itself to have a younger, well paid population.

    Why West?
    A few of the reasons why an investor may consider the western suburbs:
    • Lower than average medians comparative to the other Northern, Southern and East based inner suburbs
    • Tree lined, character home filled streets with strong gentrification potential
    • A moderately relaxed development plan, allowing infill development to cater for the increasing population
    • Increasing retail, hospitality and general business in the area – Henley Beach Rd, Sir Donald Bradman Drive etc, all have updated modern commercial fitouts. Mile End Home Centre provides a modern hub for trade to cater for the higher expectations growing in the suburbs
    • A short drive to the beach – CBD to the beach is a 11 minute drive, so all suburbs are only a short distance away from employment and amenity
    Corey’s Suburb Pick

    Mile End

    [​IMG]
    renovated Mile End home

    Bordering the western park lands – Mile End is as inner suburbs as you can get for the Western Suburbs. The area is filled with large blocks with character stone façade homes and an increasing ‘yuppie’ vibe. Driving into the CBD is simple, especially since the underpass was completed in the 2000’s. This area used to be seen as a very average area with a reasonable working class component, however it has increasingly become ‘discovered’, with new businesses, restaurants and higher median income families moving into the area – causing ongoing gentrification.
    There is a substantial renter population currently in the area, which the age demographics shows is a younger population, no doubt professionals who can benefit from the easy direct access to the CBD. As the values and desirability in the area rises, it is likely that many renters could be priced out of the market and owner occupiers increase in ownership percentage. The area will still retain a desirability in anyone needing to access employment through the CBD. Just ask David – his property management office is located in Mile End.

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

    Corey’s “what to avoid”

    Properties on and surrounding arterials. The western suburbs have a far higher density of arterial roads comparative to the other parts of Adelaide. The areas are used as a transport corridor of North-South, as well as from the port and airport to Adelaide. Keeping away from these arterials will limit valuation issues from noise pollution and decreased desirability.

    Roads to be mindful of:
    Henley Beach Rd, Sir Donald Bradman Drive, Marion Rd, Richmond Rd, South Rd, Airport Rd, Grange Rd, James Congdon Drive.
     
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  2. D.T.

    D.T. Adelaide Property Manager Business Member

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    Adelaide Western Suburbs

    A great spot for investors seeking capital growth or renovation / development opportunities as the west is relatively cost effective, especially considering proximity to CBD, well established facilities and the like.

    As explained in our last area review, vacancy rate of suburbs and the rental vs owner occupied ratios are important metrics to look at so I’ve sought out the statistics and provided graphs again.

    [​IMG]

    Aside from the obvious outlier above, the vacancy rates match the national averages in this area with good results coming from the more traditional owner occupier filled areas.

    [​IMG]

    Being the highest in both vacancy and rental population spells a disaster for Brompton, with the suburb being predominantly newly built apartments. There’s some trendy spots formed nearby but the glut formed is obvious in the graphs. Aside from Brompton, a lot more owner occupiers are present than in places we’ve covered in our previous area reviews. This is great for the demographics and stability of the area, hence the capital growth prospects. This does mean poor yields though.

    Typical rents in the area

    I’ve graphed the typical rents in the area, but unlike previous write ups have separated houses and units as there are a lot more units in this region and they typically take longer to rent as well. Notice that they’re higher in Brompton as the suburb is predominantly new builds as discussed earlier.

    [​IMG]

    What are each of these suburbs like?

    Woodville – Quite a large area as it has separate suffixes such as –Park, -North, etc. In general it’s fairly well regarded, has the train line, major hospital and a decent commercial strip along Port Rd and Woodville Rd. Some sections are quite popular with the Vietnamese.

    Richmond – Light industrial and adjacent to the airport the suburb is not as well regarded, but proximity to the city does attract some.

    Mile End – Adjacent to the city with 100 year old period homes. Trendy commercial along Henley Beach Rd and more traditional commercial along South Rd which is the main thoroughfare through Adelaide.

    Torrensville – A popular trendy spot as has Thebarton Oval, Thebarton Theatre and the Henley Beach Rd precinct passing right through it.

    Fulham – Nice houses, well-kept streets and a friendly vibe. Demographic here is an aging population mostly hailing from Italy or Greece.

    Seaton – Good distance to both CBD and beach without being near the airport. Popular with younger couples who want to build H &L in infill redevelopment rather than edges of metro.

    Flinders Park – Old character / period homes mixed with old industrial / commercial.

    Lockleys – Avoid the section that is close to the airport but above Henley Beach Rd is quite a nice area. St Francis School is quite popular.

    Croydon – Character houses in the pocket bound by South Rd and Port Rd ripe for renovation opportunities.

    Brompton – Despite being adjacent to the city was a lower socio area a generation or two ago has now been entirely reinvented, mostly into OTP townhouse and unit developments.


    Dave’s Suburb Pick:

    Croydon

    Croydon used to be an out of favour suburb that has come back into favour in a big way. It has lovely character / period homes which are sure to go up in value as their supply is diminishing and are irreplaceable. The run down ones also make good renovation projects.

    It is very convenient place for residents to get to work, being 2 stops on the train line or a 6km drive from the centre of the CBD. It also has good statistics as shown above.

    South Rd and Port Rd are currently both undergoing expansion so steer clear of properties that back onto these for fear for being turned into an express way. The light rail / tram from the city is also rumoured to extend up to Croydon.

    [​IMG]
    A typical street in Croydon

    Dave’s “what to avoid”

    Aircraft noise. The layout of Adelaide is such that the airport is roughly halfway between the CBD and the beach and most people don’t like living near it. To maximise the desirability to tenants, I’d avoid buying investment properties in suburbs adjacent the airport or those which are underneath the flight path. The below graphic shows departures in green and arrivals in red.
    [​IMG]
     
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  3. Coota9

    Coota9 Well-Known Member Premium Member

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    Great write up..
     
  4. Joshwaaaa

    Joshwaaaa Well-Known Member

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    Would have been some huge bargains through Flinders Park/Beverly just a couple years ago.


    A whole big batch of ex-housing trust semis were sold off, demolished, split, then rebuilt on straight across from my work in Beverly about 2 years ago. Then there was some big news of ground contamination through the area not long after, haven't heard much about it since
     
  5. Adam W

    Adam W Member

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    As always guys, great work! Look forward to the next installment ;)
     
  6. nothingman

    nothingman Active Member

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    inner west is great location wise because travel times to the city,beach,airport and a major mall (marion or westlakes) are usually quite short compared to living on the east side

    the disadvantage is there is little greenery compared to the east, and potential for aircraft noise depending on where you are.
     
  7. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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    Very true - especially in terms of the streetscape's having little greenery. It's a pity that some streets have great houses along them, with dusty compacted gravel council strips.
     
  8. Giuls

    Giuls New Member

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    :)Can I ask thoughts on buying in Kilkenny
     
  9. D.T.

    D.T. Adelaide Property Manager Business Member

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    Kilkenny is ok, has decent shopping centre with cinema etc. Decent tenant demand in the area (Vietnamese trying to live near each other). Worth a further look, we can only fit 10 suburbs into the forum reviews so have mentioned those that have the most enquiries / interest.
     
  10. Giuls

    Giuls New Member

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    Thanks for your reply! I am looking at purchasing somewhere I can live for now, close to the city, that will have good potential in the future and isn't going to cost me a fortune (will be my 2nd mortgage).
     
  11. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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  12. adrian_christian

    adrian_christian Well-Known Member

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    Great write up and congrats for the effort you guys are taking... As a self professed eastern states investor, what's the 60 second argument in sending $500k to one of the chosen suburbs above versus $500k to Brisbane right now?

    Thanks again..
     
  13. D.T.

    D.T. Adelaide Property Manager Business Member

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    Lower holding costs - council rates, insurance, property management and water are all lower in Adelaide than Brisbane.

    Adelaide is an hour or 2 earlier on the cycle clock.
     
  14. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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    David's hit the nail on the head - it's a subjective argument based on where you see Adelaide/Brisbane in terms of short to medium term growth.

    Then there's the whole diversification of areas, land tax etc - which comes down to your personal situation.
     
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  15. 2FAST4U

    2FAST4U Well-Known Member

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    Plympton has really jumped in price the last couple of years. It's hard to get anything freestanding for sub 500k these days. Plympton Park has one of the fastest days on market clearance rates. Demographics wise I'm seeing a lot more Chinese in the area, which isn't surprising considering the close proximity to the CBD.
     
  16. D.T.

    D.T. Adelaide Property Manager Business Member

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    Yep - completely agree. This suburb is earmarked to be covered in an upcoming edition of our area reviews ;)
     
  17. Jake Milne

    Jake Milne #1 Buyers Agent, Vic. Business Member

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    Big fan of Adelaide right now, good work guys.
     
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  18. D.T.

    D.T. Adelaide Property Manager Business Member

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    Jake Milne likes this.
  19. jins13

    jins13 Well-Known Member

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    Great details and thanks for the write up!
     
  20. joel

    joel Well-Known Member

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    Anything well priced in the west is getting snapped up quickly. Small blocks and or ugly houses seem to sit on the market a little while.. everything else is under contract! I wonder where we sit on the ol' property clock