Adelaide Investment Suburbs

CJay said:
Indeed. The Southern Adelaide has a job deficit, with there being not enough jobs available in the area to sustain the population size. Hence why the expressway duplication becomes so important for commuters.

The constant constraint of commuting times will be a contributing factor to people upgrading away from the area, which doesn't create that competition needed for rapid appreciation of property asset prices.
Click to expand...

Well, let's look at facts and figures CJay. Do you have any evidence (to justify the "not enough jobs" claim) that:
a\ employment participation is lower in Onkaparinga compared to Playford? and that
b\ unemployment is higher in Onkaparinga compared to Playford? and
c\ wages are lower in Onkaparinga compared to Playford?

Turning to the second point:
d\ is there any evidence that property prices appreciated more in Playford compared to Onkaparinga?
e\ population growth was lower in the South

I think most people would agree that there are many qualitative factors in favour of the South. I guess I'm looking for some facts and figures that would justify that despite that investing in the North would still provide superior overall return (not just gross rental yield). Answers to a\ to e\ would be a good start.

NB: like your comments strongy1986
 
Alrighty Logica. :)

I haven't stated once that there is lower employment participation within the Southern region (we'll focus on Onka), but employment opportunities. 52% of residents travel outside of the area for their work, of which only 5% have employment within the Onkaparinga South Coast (Seaford, Seaford Rise, Seaford Meadows, Aldinga Beach, Sellicks Beach etc). This is an alarm bell for me, where there is little employment opportunities at a significant distance from the CBD. Don't get me wrong, I like beachfront property, but prefer properties located in Brighton etc.

http://profile.id.com.au/onkaparinga/residents

A,
Playford 9.5%
Onkaparinga 5.9%

Intergenerational unemployment is a well known problem in Playford. Interestingly Playford's increase in employment has been rapidly increasing far beyond the avg. rate compared to Greater Adelaide 2001-2006 is 3.1%pa (SA 1.9%pa), which is similar to the fact that Playford's GRP is outstripping the pace of the rest of SA:

GRP growth rate for 2001-2006 is 5.1%pa (SA 2.8%pa)

http://www.playford.sa.gov.au/page.aspx?u=1482

B, Read above.

C, Onka definitely has higher wages. The data is a tad skewed with both areas being large and diverse, so I'll leave it at that. Income data tables however for those interested:

http://profile.id.com.au/playford/individual-income?WebID=10&DataType=UR

http://profile.id.com.au/onkaparinga/individual-income-quartiles?WebID=10&DataType=UR

D, Care of Onkaparinga City's website. 2005-2011:

36% Playford median price growth
29% Onkaparinga median price growth

http://www.onkaparingacity.com/onka.../stats_facts/housing/average_house_values.jsp

E, 2000-2010 time periods:

Onkaparinga's population grew 7.9%
Playford grew 16.3%.

ABS Catalog 3218.0 Regional Population Growth, Australia, Table 4.

Hope that helps Paul.
 
Hey guys,

Short of hijacking the thread, I'd be interested to hear what posters think about my situation.

I'm mid 20's, steady income, living in shared arrangements ($130/week).

Have up to a $100k to drop as a deposit.

Currently toying with the idea of purchasing a PPOR (FHB) or IP (first).


Option 1 - PPOR


  • Looking at inner north/ west 7kms from CBD
  • Older, although immediately liveable house on >600m2 land component
  • Small improvements to house and potentially rent out in short - med term
  • View to long term hold.
  • Would still be sharing = 5% yield

Option 2 - IP


  • Still view to long term hold and CG, but larger yield =6%
 
Yes, you are intruding but hey who cares. They are a bit further out from city to what u are thinking but Glengowrie, Warradale, Morphettvile can offer big blocks, close to beach (some will say so what), Marion shops and pool, Glenelg tram, Brighton high zone. Marion council is pro dev but there are some small parts in Glengowrie that are Character zoning. These suburbs are adjacent to Glenelg, Brighton and Somerton Park and will offer great CG over long term if you can offered to hold on.
 
simo123 said:
Hey guys,

Short of hijacking the thread, I'd be interested to hear what posters think about my situation.

I'm mid 20's, steady income, living in shared arrangements ($130/week).

Have up to a $100k to drop as a deposit.

Currently toying with the idea of purchasing a PPOR (FHB) or IP (first).


Option 1 - PPOR


  • Looking at inner north/ west 7kms from CBD
  • Older, although immediately liveable house on >600m2 land component
  • Small improvements to house and potentially rent out in short - med term
  • View to long term hold.
  • Would still be sharing = 5% yield

Option 2 - IP


  • Still view to long term hold and CG, but larger yield =6%
Click to expand...

Hi Simo,

The primary difference between the two scenarios is that the IP's loan and holding costs will be deductible, whilst PPoR will not be (but you will be up for $130 continued sharing arrangements). Financially if you can continue living with such cheap arrangements, it sounds like you may be in a position to rapidly grow a portfolio in the short to medium term, or buy an IP, offset a significant portion of the loan with remaining funds which can be kept in reserve for a PPoR in the future.

A PPoR purchase in the inner suburbs with appropriate renovations may allow you to leap frog onto further properties through accessing manufactured equity.

There is a third alternative, doing both. 100k does provide the potential for a PPoR and IP purchase (within certain price ranges). It comes down to comfort levels however, I find many of my younger clients prefer to 'test' the waters with one property first, then make purchases two, three, four in rapid succession as they understand how property ownership works a bit more.

In any case, the fact that you've saved 100k at your age is an achievement in itself. Make sure you use the funds wisely, as this initial seed can set you up for life.
 
CJay said:
Hi Simo,

The primary difference between the two scenarios is that the IP's loan and holding costs will be deductible, whilst PPoR will not be (but you will be up for $130 continued sharing arrangements). Financially if you can continue living with such cheap arrangements, it sounds like you may be in a position to rapidly grow a portfolio in the short to medium term, or buy an IP, offset a significant portion of the loan with remaining funds which can be kept in reserve for a PPoR in the future.

A PPoR purchase in the inner suburbs with appropriate renovations may allow you to leap frog onto further properties through accessing manufactured equity.

There is a third alternative, doing both. 100k does provide the potential for a PPoR and IP purchase (within certain price ranges). It comes down to comfort levels however, I find many of my younger clients prefer to 'test' the waters with one property first, then make purchases two, three, four in rapid succession as they understand how property ownership works a bit more.

In any case, the fact that you've saved 100k at your age is an achievement in itself. Make sure you use the funds wisely, as this initial seed can set you up for life.
Click to expand...

Hit the "Like Button".
 
Why do people put such an emphasis on what has happened in the past with property?
If we are talking about investing then lets look from now onwards

Maybe Elizabeth was just simply too cheap and that's why it has made good gains.

Well some to those who have done well out of the area. It takes guts to act on opportunities like that.

Do you still see the same growth opportunities though? I dont and i would be surprised if the area continued to outperform onkaparinga from this point on.

Playford area suburbs are the cheapest capital city suburbs in mainland Australia. So there good growth in recent history is definitely not a long term trend. Only saying that because many like to point out its good growth history (over what time frame !)
 
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? :cool:

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. :)
 
Fantastic summary there Paul. :)

Spot on with the error, I have a feeling that a previous figure was still in the calc putting it out significantly.

As you've suggested, it's quite a feat to provide a comparative analysis in the two super council zones.

I'll be interested to gain some insight into Onkaparinga and surrounds at the next meet up.
 
Cor Blimey.........the last couple of posts are pretty in depth for a Saturday.Below is a paragraph from a prominent PM in the southern areas.I asked the question what are the better yielding suburbs at present...........Her response

Presently the interest is very good in the Southern Area. This week we have filled a property in Port Noarlunga $400 per week, Hackham West for $295, Christie Downs for $300 and also Port Noarlunga South for $400.

As you can see they are very different areas and prices. I am finding that there is once again a lot of UK people coming through these areas. The point of difference with myself is that as you can see I work on weekends. I find that you get the whole family through and it is an easier time for families who work to attend opens.
 
One major difference between P and O is Onk has a pop. of 160,000, whereas Playford's is 70,000.

I think if you increased the area of Playford (perhaps add Salisbury or TTG) to make the 2 more comparably similar you could find the statistics very different.

The biggest downside to the south imo is the drive to the city. North to the CBD is a breeze compared to that trip.
 
weg said:
One major difference between P and O is Onk has a pop. of 160,000, whereas Playford's is 70,000.

I think if you increased the area of Playford (perhaps add Salisbury or TTG) to make the 2 more comparably similar you could find the statistics very different.

The biggest downside to the south imo is the drive to the city. North to the CBD is a breeze compared to that trip.
Click to expand...

Combining them may be difficult as Salisbury council area is fair bit different to Playford but point taken. Happy to see the stats though if someone would care to put together a comparison.

NB: Onkaparinga is fairly diversified too, I found that Happy Valley and O'Halloran Hill seemed to perform better in terms of CG...
 
jim1964 said:
I am actively looking to purchase in Onka at present,you WILL not loose.Offered on 2 homes today.
Click to expand...

I agree with you Jim, I'm a big fan of the Onkaparinga area because of a number of factors that supports growth over the long term.

The area in general supports infil development which is something Adelaide has made a strong commitment towards. I have one in Seaford west of commercial road. Land values have really held up in that particular pocket and there is a lot of potential to renovate these 1970 type of properties which is something we will look at doing sometime down the road. Also potential now to subdivide after rezoning.

Of course there is the benefit of being on the ocean and recently the huge investment in infrastructure with the extension of the the train line out to Seaford and the duplication of the southern express way bringing the area closer to Adelaide.

And at the end of the day it's a beautiful stretch of the coast.

Jack
 
adelaide

not been on this site for a while .. tell you the truth this buy & hold strategy is a bit boring when there's no capital growth - i'm holding property in various parts of adelaide & surrounds & not seen any capital growth for years (literally) - there will never be any growth here as long as a) adelaide's population is aging & stagnant b) there is no economic growth c) the largest employer in the state is the government d) the government is bust e) SA has the largest unemployment rate on the mainland f) they keep building more new cheap houses in the middle of nowhere
 
I have been actively looking in the Christies Beach,Christie Downs,Hackam & O"sullivans Beach for the past fortnight,have made 3 offer which were reasonable and got nowhere with them,all selling within days of going on market.It seems to be a very hot area to buy in at present.
 
jim1964 said:
I have been actively looking in the Christies Beach,Christie Downs,Hackam & O"sullivans Beach for the past fortnight,have made 3 offer which were reasonable and got nowhere with them,all selling within days of going on market.It seems to be a very hot area to buy in at present.
Click to expand...

Yep, that's the way it is out there for a well located, well-priced houses. Bought several in recent months but you have to be spot on with your offers in terms of values and read the vendor's circumstances and competition accurately. good luck Jim.
 
You must log in or register to reply here.

Similar threads

kingy
Inner city / lower north shore / eastern suburb
Replies
12
Views
2K
JohnHenry
JohnHenry
A
Is it time for Laverton yet?
2 3
Replies
53
Views
13K
adz07
A
F
Contemplating buying simple investment in Adelaide around 500k
Replies
14
Views
2K
hugh72
H
D
Recommend Melbourne SE suburbs
Replies
4
Views
1K
J_aco
J
T
Mansfield
Replies
3
Views
1K
INVSTOR
I
Back
Top