adelaide update

[sash]

ArJay

I have been to Elizabeth and Salisbury 3 times. Yep, I know what the locals say...my cousins live in the Eastern suburbs in Burnside and Beaumont. They were concerned for my safety and would touch these areas with a barge pole! I got on a train from the city and walked about all over Elizabeth and Salisbury, rough yes but full of potential.

Lets keep things in perspective shall we? Most of the industry in Adelaide is in the Northern suburbs. Also substantial infrastructure is being put in there. People said the same things about Clearview and Kilburn...now they are becoming sought after by first home buyers. Also I don't plan to live there.

In August 2007 I bought in Parafield Gardens (185k)and Paralowie (190k), these are now 235k and 240k respectively. This is only the start...wait till the Northern Expressway and Defence at Endinburgh is settled...that is when you will see real growth. Also the long term per annum growth projections for these suburbs are 11% and 12% respectively...among the highest in Adelaide.

I expect the medians for these suburbs will hit 300k plus with the next 2 years. Feel free to pull me up when this is not achieved.

I know you are going to find to hard to believe the difference between the southern suburbs is going close very shortly.

SteveAdl....you may want to give your experiences also.

 

[ArJay]

I pray I'm wrong Sash....and by the sounds you've done some very solid research. Prob coming from outside SA would have some positives in that respect.

Unfortunately I'm prob too biased by previous stigma and experience to look at these areas objectively. All I can remember is that these have always been the higher yielding "undesirables" from days past.

$300k plus in 2 years? Thats big-time growth.... These are typically lower socioeconomic areas and unless they gentrify considerably interest rates and petrol prices will hit hard. When it comes to the crunch these aren't the areas people are migrating to unless forced by proximity to work.

Time will tell I guess and horses for courses. Depends if ur looking at a long term buy and hold or short term growth.

All the best
Rory

 

[sash]

ArJay,

Thanks. I am looking at the long term. Yes, agree that these were once lower socio economic areas but they are being gentrified and there is a lot of activity.

Yes, that is good growth...60% growth. Time will tell.

Where are your properties in SA out of curiosity?

Cheers
Sash

 

[ArJay]

Hey Sash.

Sorry, I should have prob keep my trap shut as I haven't done any solid research to back up my views and I hate it when others do the same, ...

Think I'm going to have to drive out there again and have a stickybeak. See if I can change my mind about the area...

Our places are more south/westish....you can still pick up some fairly good buys in suburbs like Oaklands, Ascot Park, St Marys and Edwardstown etc where the land sizes are 700 sqm+. They're about 10mins from CBD, 5mins to Brighton/Glenelg beach and 5mins to major shopping like Westfield Marion.

You prob have already had a look but other areas going gangbusters are the cheaper 'burbs close to the Port like Rosewater, Queenstown, Pennington etc. The ship has sailed a bit there tho. 20%+ growth last year with median prices up into the $300ks now. Still some beautiful places down there tho...real old world charm.

Personally I still think Christies Beach is excellent value. Colonnades is huge now and it's just so quaint down there with great views and a nice relaxed atmosphere...

R

 

[sash]

No worries ArJay. Have a look at Paralowie in particular....it has some value still left.

Agree about the Christies Beach.....but the market is red hot and too much competition.

If you want to look at what is happening in the Northern suburbs look at what has happened to Elizabeth.....it is start to rival some Salisbury suburbs for prices.

Agree that Edwardstown and St Mary's are great but again too hot.

 

[steveadl]

Have you guys visited these areas? These are some of Adelaide's rougher/est suburbs. To quote my Avatar
"I feel like I'm taking crazy pills"

I just can't see the growth potential...someone please prove me wrong.

Yes, visited them quite a bit. But your views are quite common of those who live here, which is why the interstate investors made most of the money buying up North years back. REA's I talk to also tell me about how locals can't get their heads around what's happening up North and are being trumped continually by the WA/NSW guys - although apparently they are finally starting to wake up.

I'm not under any illusions and trying to pass of Salisbury etc. as prestige suburbs. They are what they are - lower socio economic areas where (especially) FHB's etc can get into the market.

This has been on the cards for years....most ancillary industry has been preparing for this for some time.

Definitely! I'm surprised it didn't happen years ago to be honest. That A380 is a shocker IMO so most saw it coming the last couple years.

As for the development of the site, it will probably be like everything in SA - no-one can make a decision - it will sit empty for years and people will get used to driving past that big old empty factory that used to be Mitsubishi......then a developer will buy it and make squillions !

Agree Kegger - I think at first they'll try and get other industries on the land, but if it doesn't work, bulldoze the lot for the land - that's 64 hectares of land that's only 10km from the CBD. But yeah, you're right - everything in SA takes a while to go through (Britannia round about anybody! )

I pray I'm wrong Sash....and by the sounds you've done some very solid research. Prob coming from outside SA would have some positives in that respect.

$300k plus in 2 years? Thats big-time growth.... These are typically lower socioeconomic areas and unless they gentrify considerably interest rates and petrol prices will hit hard. When it comes to the crunch these aren't the areas people are migrating to unless forced by proximity to work.

Check out REA.com Arjay - $300k isn't that far away at all. So not especially big time growth needed. Old houses with enough land are going for the mid to high $200k's already. Check out Mawson Lakes prices - that's Salisbury area, just given a nice new name.

You have to remember - it's a matter of prices elsewhere too. If 5-10km out from the city continues to rise, the outer suburbs will keep up as people look to them as alternatives or as the only alternative. The problem a lot of locals have is they can't look past the name and the stigma that goes along with the suburb names. Personally I don't mind the Salisbury area to live in - I don't talk to my neighbours anyway (besides, I'm only 7km out and have enough ferals around ), the only reason I wouldn't live there is I don't want to be 1hr away each way from work. But people who don't have the luxury of being able to choose, will buy there.

If prices 10km out are going into the mid $300k range and rising - Salisbury won't stay stuck at the mid $200k's. Ignore the suburb names and just look at a map of Adelaide. You have in a direct line from the city:

- Prospect: $400-600k+
- Kilburn/Blair Athol/Enfield/Clearview: mid to high $300k's
- Pooraka/Para Hills: high $200k's to low $300k's
- Salisbury suburbs (yes there are a lot): Mid to high $200k's
- Elizabeth: low $200k's for old, mid $200k's for new.
- Munno Para West/Andrews Farm/Smithfield/Blakeview: High $200k to low & mid $300k's for new.

Can you start to see a gap forming between the higher prices closer in, and the higher prices being achieved further out, and somewhat of a discount still in Salisbury. Good opportunity IMO.

 

[ArJay]

Good post Steve...

Good point you have about the ripple effect pushing out into the burbs. Guess I'm gonna have to open my mind a bit before I get left behind

R

 

[steveadl]

Our places are more south/westish....you can still pick up some fairly good buys in suburbs like Oaklands, Ascot Park, St Marys and Edwardstown etc where the land sizes are 700 sqm+. They're about 10mins from CBD, 5mins to Brighton/Glenelg beach and 5mins to major shopping like Westfield Marion.

You prob have already had a look but other areas going gangbusters are the cheaper 'burbs close to the Port like Rosewater, Queenstown, Pennington etc. The ship has sailed a bit there tho. 20%+ growth last year with median prices up into the $300ks now. Still some beautiful places down there tho...real old world charm.

Very good areas to invest Arjay, well done! I like Kurralta Park etc. especially too, the amount of development going on there is great.

Problem I found with the Port suburbs is they are always such small blocks, and supply is fairly tight. Not often you get decent sized development blocks up for grabs (although not as much of a problem if you only want the house).

 

[steveadl]

Good post Steve...

Good point you have about the ripple effect pushing out into the burbs. Guess I'm gonna have to open my mind a bit before I get left behind

R

Don't worry Arjay - everyone's different. I'm sure I'd love to have the properties in the suburbs you mentioned!

 

[kegger]

Hi folks

ArJay, just want to prove a point here - some of the suburbs you have mentioned, in particular Rosewater, Ascot Park and Oaklands Park, which are now very nice areas to live and invest in, were not always that way. Ascot Park and Rosewater contained some of theroughest streets in Adelaide and I mean rough. Oaklands Park also had some very interesting little ghetto type areas. We lived in Oaklands Park for a SHORT period of time when we first left school and got out of there quick smart - I saw some stuff I never want to see again.....
Now, these places are cool, close to the beach, expensive and sought after. So the Northern suburbs of Adelaide, even the really dodgy areas that might look like a bit like the Gaza Strip must be a good investment, if there is essentially no downside risk because it can't get any worse ! It can only get better !
Even Brompton which is a suburb very close to the city had the headquarters of a bike club that was a most interesting place - I think it's still there. I remember a few years ago a bomb went off in the street outside the clubrooms and smashed the windows of my friends place a few hundred meters down the street. Does this make the area a bad investment.....nope, probably pick up some good bargains in there.

 

[eKwatee]

I live in Adelaide and have now 2 IP in Mawson Lakes + PPR. I purchased all off the plan. My last purchase was off the plan, contract price $199,000. I settle next week, bank valuation just came in at $270,000. I have a tenant waiting to go in at the end of Feb at $270 p.w.

My second IP was purchased for $209,000, settled 12 months ago with $260p.w. rental return and a recent bank Val of $270,000.

Mawson Lakes has quite a few apartments for sale around mid $200,000's

I would highly reccommend this area

 

[ArJay]

Hi folks

ArJay, just want to prove a point here - some of the suburbs you have mentioned, in particular Rosewater, Ascot Park and Oaklands Park, which are now very nice areas to live and invest in, were not always that way. Ascot Park and Rosewater contained some of theroughest streets in Adelaide and I mean rough. Oaklands Park also had some very interesting little ghetto type areas. We lived in Oaklands Park for a SHORT period of time when we first left school and got out of there quick smart - I saw some stuff I never want to see again.....
Now, these places are cool, close to the beach, expensive and sought after. So the Northern suburbs of Adelaide, even the really dodgy areas that might look like a bit like the Gaza Strip must be a good investment, if there is essentially no downside risk because it can't get any worse ! It can only get better !
Even Brompton which is a suburb very close to the city had the headquarters of a bike club that was a most interesting place - I think it's still there. I remember a few years ago a bomb went off in the street outside the clubrooms and smashed the windows of my friends place a few hundred meters down the street. Does this make the area a bad investment.....nope, probably pick up some good bargains in there.

Good points raised here kegger...

In previous posts I wasn't so much saying that areas don't gentrify, certainly they do as you stated, I was more saying that the fundementals of the suburbs mentioned are more supportive to long-term growth.

I quite obviously haven't done anywhere near enough due diligence to comment on the northern suburbs (and in hindsight should have kept my trap shut).
Just from what I do know about the location from previous visits there didn't appear to be the same sort of drawcards suburbs like Oaklands Park, Rosewater, etc have/had (ie. vacinity to the beach/CBD/infrastructure) which assure long term CG.

Rory

 

[mingling]

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cheers !
Ming

 

[eKwatee]

I sell in the North East of Adelaide and have been keeping a close eye on Ridgehaven, why because

1. Zoned R(C) - Residential (central) or High density zoning - This allows you to build groups of units of which are highly popular in this area because there are plenty of single elderly people or elderly couples living in the area who own the house with larger blocks and all they want to do is move into a new low maintenance home and also the distance to the obahn bus interchanges express route to the city, this attracts tenants and student looking to rent in this area in low maintenance new units/homettes.
2. Plenty of opportunities under $300,000 with land greater than 600m2 with plenty of blocks being around the 800m2 - 900m2
3. Once again distance to the obahn bus interchange express route to the city.
4. Only minutes to Tea Tree Plaza shopping centre - Huge retail outlet.
5. Plenty of cafés/restaurants/take away outlets near by
6. Plenty of urban redevelopment being undertaken
7. Were achieving good returns for our developers who knock down, build & resell immediately or sell off the plan.
8. Close to popular schools

 

[silversands]

Aldinga Beach

Hi everyone. Have been reading these posts with great interest. This is my first post at somersoft, if you're able to enlighten me as much as you have in the past couple of hours, I think it will be the first of many.
I would love to hear from anyone with good knowledge ofAdelaide's deep south. Christies Beach is too hot to handle now, but 15 mins further south on the coast is pristine Aldinga Beach. We purchased two blocks of land less than a year ago for $82k and $87k in the new Sunday estate. There will be a new land release in there tomorrow and similar size blocks would now be $140k (480 - 500sq m ) People have been camping out since last Saturday, before they even knew how much they would cost!
We have used project builders to construct 4 bed 2 bathroom homes with double gge's on these 2 blocks and they will be ready soon and set to rent at close to $340. Houses will be worth about $360k when complete. We were initially buiding to sell for a quick return but with rental yield at 5% and good capital growth already, we would love to know what you all think about the long term capital growth prospects.
It's 40 k's to Adel, which is a 45 minute drive via the (white elephant) one way expressway and it has arguably adelaide's best swimming beach. McLaren Vale wine district is on it's doorstep and local shopping centre increasing in size. 2 new retirement villages under construction and new child care centres too. New school just opened up, but lack of public transport is still an issue. I really want to hear the good the bad and the ugly! Let's hear it!

 

[steveadl]

I sell in the North East of Adelaide and have been keeping a close eye on Ridgehaven, why because

Agree with you on Ridgehaven for all the reasons you mentioned Ekwatee. Also will be interesting to see the expansion of TTP once they link it up with Plus, but I think that's still another couple years away?

I was looking late last year through Ridgehaven. Was quite surprised at how far the area has come along. Friends of mine built some warehouses in the industrial area a few years back and do quite well out of them. They also bought an old house for future redevelopment which has been brought forward now due to water damage and subsequent insurance pay out.

I think the area has definitely got good potential. Transport to city via oBahn very easy, TAFE campus nearby, and TTP which I believe is a bigger drawing card than people realise. It is also still relatively closer to CBD than a lot of other suburbs such as Greenwith, St Agnes, Hope Valley etc.

Late last year we were looking through the area and were considering buying a unit for my partner. Found one in Dewer Ave that looked quite good - 2br, dining and lounge in a group of only 5. Thought it may go for the high $100k's. Went to the inspection with a view to putting in an offer of $180-190k and REA informed me it was already under contract for $207k. At the time for that price I think you would have been better off getting a house for future development for say $50k more. Now units seem to be heading towards the mid $200k's.

What's your opinion on the ground Ekwatee? Seems to be like the rest of the Adelaide market with a lack of supply at the moment. From the small amount of sales going through it looks like they're heading towards the high $200k to low $300k for decent sized blocks. Seems most blocks are big enough for 2, but not 3 - does that sound right? I'm not very familiar with TTG council - what sort of min. land are you looking at to get 3 units on, 700m2?

 

[steveadl]

I would love to hear from anyone with good knowledge ofAdelaide's deep south. Christies Beach is too hot to handle now, but 15 mins further south on the coast is pristine Aldinga Beach. We purchased two blocks of land less than a year ago for $82k and $87k in the new Sunday estate. There will be a new land release in there tomorrow and similar size blocks would now be $140k (480 - 500sq m ) People have been camping out since last Saturday, before they even knew how much they would cost!

Welcome to SomerSoft Silversands!

I think you've done very well with those two pruchases!

Friends of mine are building in the Sunday Estate. My brother is also currently building in the estate next door (the name escapes me). From memory his land was about $77k and his total turn key package is coming in at around $245k.

If your finances allow, I would definitely consider holding onto them rather than selling for a quick profit. Prices are set to continue their rise down there (IMO) and these two should be pretty easy for you to hold considering yield and depreciation.

 

[eKwatee]

steveadl
The reason the units are doing so well in Ridgehaven is because of the demographics, large number of retirees + your first home buyers being pushed out of the housing market and having to be satisfied with a unit.

The TTG planning departments reasonable, they do dot their i's and cross their t's. One reason if their drainage systems are primitive and site coverage is sometimes a problem for flooding. Parts of Ridgehaven is zoned R(C) - high density dwelling - Row housing can be Torrens titled down to as low as 200m2 but the site coverage then becomes an issue and retaining tanks (sometimes as many as 3-4 on community developments) need to be installed. Developers need to tread carefully here. Under R(TTG) zoning, a minimum complying Torrens title is 300m2. 3 units on 700m2 would be possible if you can get your drainage right & you need to consider the direction of the slope of the site toward or away from the street. You could go 2 storey but then your elderly market wont buy.

Keep an eye out on the internet sites as I know of several opportunities of reasonable houses on large blocks around 700-800m2 being released to the market in the next few months all under $300k each

It baffles me why more investors don't see the value in Ridgehaven. My believe is prices are 15-20% under market value but I guess investors will switch on and this should catch up in the next 3-5 years.

 

[ArJay]

Hi everyone. Have been reading these posts with great interest. This is my first post at somersoft, if you're able to enlighten me as much as you have in the past couple of hours, I think it will be the first of many.
I would love to hear from anyone with good knowledge ofAdelaide's deep south. Christies Beach is too hot to handle now, but 15 mins further south on the coast is pristine Aldinga Beach. We purchased two blocks of land less than a year ago for $82k and $87k in the new Sunday estate. There will be a new land release in there tomorrow and similar size blocks would now be $140k (480 - 500sq m ) People have been camping out since last Saturday, before they even knew how much they would cost!
We have used project builders to construct 4 bed 2 bathroom homes with double gge's on these 2 blocks and they will be ready soon and set to rent at close to $340. Houses will be worth about $360k when complete. We were initially buiding to sell for a quick return but with rental yield at 5% and good capital growth already, we would love to know what you all think about the long term capital growth prospects.
It's 40 k's to Adel, which is a 45 minute drive via the (white elephant) one way expressway and it has arguably adelaide's best swimming beach. McLaren Vale wine district is on it's doorstep and local shopping centre increasing in size. 2 new retirement villages under construction and new child care centres too. New school just opened up, but lack of public transport is still an issue. I really want to hear the good the bad and the ugly! Let's hear it!

Hi SS....welcome to the forum.

IMO why would you sell? If you can afford to hang on to them with good yield/depreciation and great potential growth then do it!

Said it before, the southern beaches are still fantastic value and are where the action's gonna be in the next 10-20yrs. Like you mentioned, all signs point to strong future growth.

The expressway will be upgraded to dual lane soon enough and the railway will have to be extended in the near future....but I think the biggest factor is the beach/coastal lifestyle on offer.

The BB gen is now retiring en masse....what would I want if I were on the cusp of retirement?
A laid-back modern setting near the beach, close to facilities, not too far from the kids/grandkids and next door to world renowned wineries would suit me fine
I think the southern coast will see a massive jump in demand in the coming decade.

Just my opinion tho...
Rory

 

[kegger]

Aldinga Beach.....interesting times they have had in the past 2 years.

I lived there in 2003 for 6 months when we bought the house I live in now (PPOR) and had a gap between settlement dates with previous PPOR. I would have to say it was the dodgiest suburb I have ever lived in. BUT, a couple of years later and my sister got married there so we went back for a squiz (they got married on the beach at Aldinga Beach), What an amzing place ! You would never have guessed that 9 out of 10 Friday and Saturday nights we were kept awake by drag racing and burnouts down the street !

Just goes to show that the dodgy areas might be the way to go !