Sydney property buyers turn to Adelaide as they sacrifice capital growth Read more: http://www.afr.

Finding this as well - about 30% of my recent clients have been Sydney based.

Most seem to be targeting either high yield suburbs or development prospects, at various places throughout the metro.

 

Hope ADL picks up the growth soon... it's too slow for the past 5, 6 years... barely matching inflation levels.

 

We've seen a continually growing high demand in interstate investors buying Adelaide property. There has been two consistent types -

• Borrowing capacity limited investors buying in the outer suburbs where their capacity will still be sufficient to grow.
• Inner/middle ring investors actively targeting blue chip areas at the expense of extremely low relative yields (sub 4%).

Both types are doing well, with the inner ring booming, and outer areas showing strong continued rental demand + trending up of prices.

I'm interested to see what will happen to outer ring properties as inner area values plateau, the price differential ratio for inner vs outer has remained constant for quite a long time, so whether this will result in a feeding of an outer boom is a possibility (much the same as the previous boom).

 

I expect a lot of the interstaters buying Adelaide property circa $800k will end up burnt. Twice the median, it's like playing with $2m property in Sydney, except Adelaide has a much smaller pool of buyers who can afford that range, so lower liquidity.

I would be surprised if that is not a direct result of your marketing here, rather than a ratio that reflects the current pool of investors who are buying in Adelaide.

 

Are you suggesting I can single handedly affect a capital city market?

Lots of home opens I go to, agents comment on volume of Sydney (as opposed to "interstate") inquiries. Stealing a glance at their call sheet confirms this.

Did you end up finding a place?

 

Nope, but not in any hurry, I will wait for the vendors to come to one of my offers before I meet their asking price

 

Interesting. Maybe it'll help to sell my last IP faster.

 

what do you mean by this? your saying it will have no effect on your borrowing capacity?

 

No, investors who had their servicing axed by the APRA driven lending policy changes will be seeking out positive cashflow properties in the outer ring to increase income and servicing, or buy something they can still service for

 

Either what DaveM said, or the fact that some Sydney people can't service say 650k for a local property so they look interstate for a 250k one that they can.

 

Curious why you are selling in Adelaide right now?

 

.. its neither logical or makes much sense for investors to buy in Syd or Adelaide at these price points, I am sure mortgage brokers would confirm...?servicing and yields would not stack up

 

Watcha saying...MTR are saying a return of $570pw on a 800k house is puss poor!

The great unwashed will lynch you...!

Very shortly APRA will be be gone with one Abda Cadabra.....the clowns at APRA will go back to being academics again....

 

Completely correct - don't know anyone looking at that price bracket for IPs (PPOR maybe).

APRA issue is overblown, IMHO

 

Plenty mugs out there...just got off a call earlier with the broker who was telling me about clients who bought in Ryde for 800k..trouble financing...and rent only 560pw...go figure.

 

Is Ryde one of those bullet proof areas that Euro mentioned....

 

Don't know what Euro said.......but as bullet proof as American marines in the middle of Mosul...

Over 5000 units in the vicinity....

 

5000 units in Ryde or Top Ryde? There's no end to projects (units) in Macquarie Park.

 

At least its not dominated by massive highrise developments (at least to this date anyway)....and generally speaking if you are near transport its not too bad! Though Rhodes just on the other side of the river has heaps of not too dissimilar units.