hi there - new to the forum so pls treat me gently -
i've just read most of this thread & i just don't get the current fascination with elizabeth - whilst i appreciate that rental returns there are pretty good at the moment, i'd suggest that 2/3 years ago the place was undervalued as an ugly duckling - 3 bedders for $70k/$80k & the downside from there was pretty limited
Agreed a few years back Semi's were going for $25k
- however in the property investment game the long run is really about location & for me elizabeth has nothing - not close to the coast, not close to the cbd, no views, dodgy public transport, it's as hot as hades in the summer, dry & dusty & cold in the winter
They have train lines going straight into town, but more importantly, people that work in the area (technology, defence etc) don't mind living in the new houses that are being built. As far as weather, well I feel pretty hot and I'm only 8km out from the CBD
- with prices now pushing $200k i can't see that there's money to be made there in terms of capital appreciation.
I believe there is less capital appreciation to be made now, definitely. However, you have to look at supply and demand, as house prices over the rest of Adelaide continue to rise, Elizabeth et al will get the flow on effect as well as people with lower budgets who are left with less options. You also have to look at the land value - if you're talking about an old house on a block of land that is 800m2 that is selling for $190k (or now pushing through $200k soon) - upon development, that is 2 blocks of 400m2 that if you go into the new estates will be selling for well over $100k now and increasing quite rapidly (see Lakeside @ Andrews Farm, Playford Waters etc.). It is less of a bargain now when the prices get pushed towards and through $200k, but these same blocks were selling for $140k only a few months ago when the new releases were still over $100k - hence I believe some of this is a natural market correction, the same that happens in any suburb when old houses become increasingly valuable/economical purely for the land component.
- it is still a low socio area & the opening up of new development land close by can only depress values by increasing housing supply.
Totally agree, it is still a lower socio economic area, although not as much in the newer estates. I'd have to disagree about the new estates depressing prices - Andrews Farm and Blakeview hardly existed 5-10yrs ago, now look how huge they are. Prices have increased dramatically in the surrounding suburbs as these developments were being built out. Now the development is starting in Munno Parra West - and only just the beginning, the paddock (if you could call it that) between the old MP and MPWest is going to be developed as well as well as another big lot at Blakeview. Also, as the current Govt. zoning stands, they are reaching the urban boundary limit being stopped at the North by the Gawler belt (& that councils determination to keep their green belt), the East by the hills, and the West by the desire of the govt. to keep the agricultural land for local industry (although this could change one day hopefully).
I appreciate the signs for adelaide look promising, (& the property media can't help but talk it up) but it doesn't follow that just because WA had a resources led boom & SA also has alot of resources activity that the same will happen in adelaide. Mining activities can still be run from the eastern states, there is no real need for a huge presence in adelade the same way as it is necessary in perth (due to the distances involved)
Totally agree, I don't believe the boom will be as big as the WA boom of recent years.
- also having lived recently in both perth & adelaide i don't think the other fundamentals are so strong in adelaide - the beaches are nowhere near as good, there aren't heaps of cashed up oldies in the same way that perth retirees are willing to blow $1m on a busselton pad - most of the oldies in adelaide are old brits who came over in the 50s, and the state government (despite being terribly daring by adelaide standards in extending the tram line 2km)
Don't get me started! are nowhere near as adventurous as in WA - re-development plans are all small town, compared to the mandurah railway & sinking the central railway station
I don't know about WA so can't comment, but I agree, our infrastructure projects are minimal/small projects, and in my opinion whilst good, are inadequate.
i do think there will be capital growth in adelaide, if only because it is the cheapest real estate market in australia. However it will take longer & won't be as spectacular as in WA -
Agree with that too, although only time will tell, and I'm sure some areas will do very well too.
so now that i've panned the popular concensus, i ought to stand up & be counted .... there will be niche markets - the student rental is & will continue to be huge in adelaide - the suburbs around port adelaide should benefit from the regeneration of the port area
I would point out that some people (myself included) would have had the same thoughts 10yrs ago about the Port area as you currently have about the Elizabeth area.
- i'd look around plympton, glandore, edwardstown, marion
agree, st mary's, on the coast at brighton & southern beaches
definitely, i'd consider henley beach to still be cheap & well located
agree - places like normansville have to be good buying - a great beach, holiday rental, retirement teritory & good property less than $300k -
I believe you're right, as Elizabeth area has become more expensive, it does make other areas more attractive, but not every property has to be near the CBD and water to go up in value. Look at it another way, if over the next 10yrs Adelaide's other suburbs keep rising, and break through an average in the mid $400k's - I'd say it's a pretty good assumption that the Eliz's will go up as well and not just stick at the $200k level. There is no border where at Salisbury the median will be $330k, then 2 streets over at Elizabeth, the median will be stuck on $200k. Also realise that this is discussion on Elizabeth et all, so it will be focussing on those areas and their features. This is not to say this is the only place in Adelaide I would invest - it just happens to be where I've been investing at the moment as I believed prices were undervalued. I've recently started looking elsewhere as Eliz's become increasingly more expensive
Closer to the mining territory - port augusta, port pirie & whyalla will all make money, a fair bit of the capital appreciation has already happened - i'd go for a lifestyle spot (the same as happened to port denison & dongara) - something like ceduna & streaky bay -
Totally agree, I like Pt Pirie (despite the smelter and the stigma that has brought over the years), and I think Ceduna could be a fantastic buy in the new Ceduna Keys development depending on the prices.
anyway, that's my 2 pennies! - having said all that i bought 2 units in Werribee Vic a few months ago & reckon that they've gone up a good 20% in that time!
Beautiful feeling isn't it! My last IP I bought in June has gone up 30% since then (my own valuation)