Moving from Sydney to Adelaide to do Developments

Hi everyone ,

I am a property strategist/valuer in Sydney and sell off plan/house and land in QLD, NSW and VIC currently.

Anyway, enough about me!! , hubby and I have a couple of houses in Sydney which we bought over 5 years ago, they have done very well and are now wanting to do some small developments (say two executive terrace homes, architecturally designed) or even a large reno/extension near beach (you know older home, modern extension, plunge pool etc), higher end.

We generally renovate on top of our current businesses, bit of a lifestyle thing for us ! Plus I am an agent so can sell off plan.

We dont want a huge amount of financial risk or mortgage as we are 40's with a young child, but we love Adelaide and are thinking about doing something middle ring (within 15 kms of city) or the beaches areas.

So a few questions.

1. Although lots of planned state spending, economy not strong in comparison to other states and population growth slowest in Australia, is this having an effect on middle ring development?
2. Beach or Metro, whats your pick, any growth suburbs that are just about to crack?
3. Has the boat sailed for spiltter lots and creating some really nice exec homes close to CBD
4. Any opportunity for industrial conversions in the Adelaide? or even Church conversions.

We are looking at doing for profit, understanding that $$ is not as much in it as NSW or VIC by any means, but it is really affordable for us and we can do it with very little financial risk + as we said we LOVE Adelaide!

Anyone happy to chat or help out? Starting my DD and would love some pointers, very different market to what I am used too - Thanks Sash

 

Hello Sasha,

One bit of advice, take the Sydney hat off here, its a different set of rules altogether.I work with numerous interstate clients, this is always my 1st bit of advice.Its a different world here.

 

Hi Sasha

One of my clients has done a lot in Adelaide, even though they are based in Brisbane. They did grow up there and know the market well.

Good luck with your adventures and hope you stick around here, there are lots of experienced, knowledgeable and interesting characters to learn from.

 

For the most part with what I see with clients is that there is very marginal if any profit right now in small scale development, unless it's a unique property and sold below the expected range. (ie a corner block which may have been slightly noncomplying, so sold without developer margin and then was approved with an exception for a corner division)

The real profit remains in 3-4+ size developments which knock out most mum and dad developers who otherwise create too much competition with their low expectations on returns. (inexperience or fudged numbers, why would someone choose to do a development with a best case 10% return etc).

 

Thanks so much appreciate everyones feedback !!

 

That sounds amazing!

One question though, what is the market for this type of property in Adelaide? You would want to make sure you have buyers who will want properties at this price point before you start.

 

There are a lot of 5-7 townhouses development going on in north east corner, and they are all low end stocks, as in less than 500k range. They were mostly built to make money, low quality, and have no prospects in cg. But they sell very well because thats the market level in ADL. Anything above that price range, is hard because for a $700k, $800k, people expect a palace.

Another option is to renovate tired old character home in premium suburb, this has been very successful for experienced players. There are rich buyers who willing to pay more but only in premium high end suburbs.

 

Thanks so much, I really appreciate your time It is a very different market to Sydney, so I am trying to do as much DD as I can. What suburbs would you suggest looking for a character home in ? premium suburbs..?

 

Yes thats what I am trying to ascertain, I need to see if there is a market for it in Adelaide, I am doing loads of DD and looking at different options thanks so much for responding.

 

Adelaide richies love character homes, those original high ceilings, solid bricks in Unley, Toorak Garden, Burnside, Belmont, Kensington, St Peters, Springfield, Prospect, or even smaller courtyard homes, terrace in Parkside, Norwood, Walkerville.

But smaller homes wouldn't yield you big margin anyway. Someone willing to paying $1.4M for a cute little art deco terrace home just doesn't happen in ADL. The mindset and expectation is different, people expect more values for every $ they spend.