Hi CJay, you've been busy
Thank you for providing the stats and importantly the links to info sources. I guess I've asked the questions to highlight that as investors we do need to look at facts and figures and try to be objective about our decissions. Balance the qualitative and quantitative info and match it to the investment strategy and the risk profile of the investor.
For the record, I'd like to summarise / correct some of the socio-economic data (based on ABS census 2011):
Employment participation (people in full time work) is about equal: Onka 55.4%, P: 55.9%
Unemployment: O: 5.9%, P: 9.5% (+60%)
Professional / manager: O: 26%, P: 18%
Labourers: O: 11%, P: 17%
Median personal income per week: O: $543, P: $455
Median household inc: O: $1,083, P: $896
Med family inc pw: O: $1314, P: $1063 (app. -20%)
Tenure
Owned outright: O: 29%, P: 21%
Rented: O: 23%, P: 36% (+56%)
Median rent: O: $250, P: $200 per week
Whilst Playford's income is much lower and unemployment much higher, its population growth is much faster: 13% v 6.6% last 5 years (census data) and building approvals also much higher: 3650 v 2800 (houses last 3 financial years). Much more people rent in Playford.
How does this all translates into median house prices and capital growth?
I think there is an error in your arithmetics CJay. Based on the Onkaparinga website, average prices 2005-2011 increased by: O: 46% v P: 36%.
This type of snapshot can be fairly misleading though and the data uses average rather than median prices (and many Flagstaff Hill properties sell for up to $1m). Therefore, I'd like to use the median CG stats based on rpdata (no liability for errors or ommissions, make your own enquiries).
Quarter 2 2013 median house prices: O: $315k, P: $227.5k
CG stats:
ONKAPARINGA CG 2003~13 (10 yrs): 67.7%, CG last 5 yrs: 7.2%, CG 12 mths: 3.5%, Drop Peak to Trough (2010-12): -9.1%
PLAYFORD CG 2003~13 (10 yrs): 81.7%, CG last 5 yrs: 5.5%, CG 12 mths: 4.8%, Drop Peak to Trough (2010-12): -11.4%
CG over the last (flat) 5 years has been slightly better in Onka but Playford outperformed Onka over the last 10 years. Price drop peak-trough (2010-2012) has been more significant in Playford but prices have recovered better in the past 12 months (Q2 '12 to Q2 '13). Arguably the data shows more volatility in CG in Playford v Onka. This is in turn reflected in higher rental yield achievable in Playford? (7% plus v up to 6-6.5% in Onka). Interesting.
NB: Within each LGA, there would have been suburbs / pockets that would have performed better than average, another complication...
As I said, match your risk profile and investment strategy to the area (volatility and qualitative / socio-economic factors). Look at facts and figures and past performance but keep your eyes on the future.