Has Adelaide peaked?

[singingtheblues]

sorry, i'm confused .. i thought the thread was about whether property prices in adelaide had peaked or not! ... the answer of course is that it depends what suburb you're in!

supply is still thin & property continues to move .. i attended an auction of a run down place in goodwood just before xmas ... must have had 7 or 8 keen bidders .. drove the place up to over $700k ... not possible to subdivide - in truth i'd say a knock down .. would certianly need $250k work at least ... that makes it a $1mil property in a sub-blue chip suburb ... so there's still an appetite for half decent locations ... but there is a limit ..i watched a decent but overpriced unit hang around for weeks before they dropped the price & it was quickly snapped up ..

some suburbs probably have peaked .. but there's still growth to be had in others ! - IMHO .. the cr*p suburbs probably have peaked .. elizabeth etc (& then again, they only rose in the first place because they were cheap & had a decent yield - not because of any location fundamentals)

there's still good value to be had on the south coast, inner west suburbs .. although further out around the Port has been fequently spruked .. i just don't see it ... it's going to take for ever to make the Port a thriving trendy place .. there's just no catalyst ... it needs the americas cup!

 

[HappyCamper]

So what's driving prices in Adelaide then? Seems like there's plenty of land around when you look at Google Maps.

 

[Gools]

Today Tonight had the Property Professor on last night with his top 7 areas for growth.

Magnificent Seven Hotspots.

Mainly beachside plus a few under-valued inner suburbs. Pity they don't have the video footage of the story online.

Gools.

 

[Gools]

So what's driving prices in Adelaide then? Seems like there's plenty of land around when you look at Google Maps.

Shortage of land where people want to live! Adelaide is really confined having the hills on one side and the sea on the other. Land close to the CBD is in short supply because of this.

You can't build on the hills face zone and you can't build on the land between Munno Para and Gawler. What land were you looking at?

Gools

 

[HappyCamper]

What land were you looking at?

The bits between Elizabeth and Virginia and the bits north of McLaren Vale. What's the problem with the land between Munno Para and Gawler?

 

[Gools]

Urban Growth Boundry shields development between Munno Para and Gawler.
The Adelaide Hills Zoning blocks development to the north of McLaren Vale. If you could build there they would have already!!!

 

[Mike F]

Today Tonight had the Property Professor on last night with his top 7 areas for growth.

One question I have always had about Peter Koulizos - where is he a 'Professor'. A quick google search leads me to this page at uni sa, that states he has a Masters Degree as his highest qualification.

I always thought to be a Professor, you needed to be given the title at a University?

 

[RumpledElf]

What's the problem with the land between Munno Para and Gawler?

Gawler is convinced it is still a completely separate city to Adelaide and just *has* to have a token gap there.

My money is on the blockade eventually being dropped sometime in the next 20 years and land there suddenly being worth a fortune. For now though? Empty.

Same goes for most large tracts of vacant land you see. And of course the LeCornu site in North Adelaide - possibly the primest bit of vacant land in the entire city and last I knew about it it was still very empty and they were knocking back every development proposal ever put forward. Its not like there isn't land around, you're just not allowed to do anything with it.

 

[Gools]

RE, you can't call it a token gap. It's the Urban Growth Boundary as legislated by the Government of South Australia.

The LeCornu site has development approval. The owners just have not decided when they want to start building yet.

There's not some secret squirrel business going on. If your development fits the guidelines that your zoning dictates then you can build. It's then up to the owners if they want to develop it or wait till the finished product is worth more. There isn't a lot of land about, within easy travelling distance of the CBD, left to develop. It's that simple.

Gawler is convinced it is still a completely separate city to Adelaide and just *has* to have a token gap there.

My money is on the blockade eventually being dropped sometime in the next 20 years and land there suddenly being worth a fortune. For now though? Empty.

Same goes for most large tracts of vacant land you see. And of course the LeCornu site in North Adelaide - possibly the primest bit of vacant land in the entire city and last I knew about it it was still very empty and they were knocking back every development proposal ever put forward. Its not like there isn't land around, you're just not allowed to do anything with it.

 

[RumpledElf]

RE, you can't call it a token gap. It's the Urban Growth Boundary as legislated by the Government of South Australia.

The LeCornu site has development approval. The owners just have not decided when they want to start building yet.

I'd still call it a token gap - it is only the legislation stopping the two from merging. Its all semantics I've spent most of my time in Adelaide slowly watching market gardens on the fringes give way to housing developments that were probably once 'no go' areas zoned unsubdivisible.

I didn't know the LeCornu site actually got development approval how many years did that take!

Garbage is obviously seeing vacant land (admittedly on the fringes) from Google earth that s/he thinks is useable but legislation is the problem. I hear a good tactic if you've got lots of time is to buy up land on the fringes that is currently zoned no-go and just ... wait. I used to know an old demographer who advocated that tactic.

I wonder if people from out of town drive through Adelaide and look at the parklands and go "hrm, when are they going to rezone and develop THAT?"

 

[Gools]

I didn't know the LeCornu site actually got development approval how many years did that take!

That's what happens when you're in that league of property development. Let's say North Adelaide allows only 5 stories max. You put in an application for 10 floors and then as time goes by there is pressure for the council to allow a non-complying development to be approved. So each two years you take a floor off your application and finally you are allowed to build a 6 floor development. So Makris has a win and can now build a complex that is worth considerably more than the five story building. Sounds like a win for him to me. Has annoyed a few residents but, like you, they are in such a state of disbelief it has been vacant for that long they are just happy to see some sort of development there even if it doesn't fit the regulations.

Garbage is obviously seeing vacant land (admittedly on the fringes) from Google earth that s/he thinks is useable but legislation is the problem.

Garbage is just looking for a reason to sit on the sidelines......

The Gawler Belt might be built on eventually but the zone stops it being thrown on the market all at once. Thus removing the concern of 'Garbage' that there is lots of developable land in Adelaide that should keep house/land prices subdued.

Garbage, want to buy some park lands? Don't I have a deal for you!!

 

[HappyCamper]

Garbage is just looking for a reason to sit on the sidelines......

Not really - just looking for a reason to buy in another capital instead

Would you agree with me that Adelaide has had a VERY good run the last 4-5 years on the back of that Olympic Dam deal? Glenelg would have gone close to doubling in that period. Everywhere I look, the rental yields are lower than comparable suburbs in Sydney and the replacement cost of houses are lower as well. Maybe I'm wrong, but I'm a bit bearish about Adelaide now.

 

[Gools]

Adelaide certainly has done well over the last 4-5 years but I don't see it as a 'run'. Adelaide historically has had a much more stable real estate market than the other Australian capital cities. It seems to have good steady growth as a minimum.

Once the new Olympic Dam stage comes on line SA will benefit greatly. I think off hand it will be the biggest mine in the world, the state coffers will get a really decent cash stream from it and that will benefit Adelaide no end.

5% yields that you are looking for are available in Adelaide. Cheaper construction costs should be an indicator to by well priced blocks with potential development. Having said that, the cost of building has gone up by a huge amount in the last couple of year along with the time it takes to build. You're looking at 18 months becoming the 'norm' now.

It sure is a different market from Sydney but that's why you should be looking at it. Otherwise you may as well just continue to always buy in Sydney.

It's right that you should be comparing different markets. Good luck with your search.

 

[Ian (WA)]

I think when people are looking at the 'performance' of Adelaide metro property it needs to be considered as an extrapolated review (long protraction of time).

Forget the boom / bust / surge / resouces explosion media hyperbole dribble. What needs to be considered is a retrospective review going back in excess of 20 yrs and more.

The so called 'boom' SA metro and some rural areas has experienced has only ever been about supply & demand and parity to other states. That's it in a nut shell.......get over any other popular spin you want to put on it!!

Adel metro was always going to 'take off' at some point around the 1999 - 2000 mark as it by default had to follow up behind NSW / Vic / Qld. property markets which were becoming outrageously expensive to buy into. For those of us who remember, SA property median pricing used to be marginally in front of Perth metro for zillions of years. The WA resource sector growth & State Govt. backed immigration incentive (aimed at Sth Africa & UK) saw that state go ballistic......to the point of being unsustainable. Propety prices went sky high then free fell for a while before pulling out of a crash dive 18 months ago.

***Note to any SA pollies reading this; it's amazing what you can do by being proactive and supporting development of your state!!! (SA pollies are pissant wowser peons and not worth a pinch of cocky poo.....backwater hicks!!!.....THERE'S NOT ONE VISIONARY AMONGST THEM!!!)......I digress.

Don't get too caught up in the Olympic Dam expansion blah, blah, blah.....Adelaide / SA will never be able to compete with the WA resources sector, or Qld's for that matter; so get over your local pollie & media ***** and don't expect an instant rain cloud full of property cash to appear over Roxby Downs again, you've all missed the boat with it!!

Look, so long as NSW / Vic / Qld / WA continue to experience price increases, SA will always lag behind but be destined to catch up again. So long as it is still affordable to buy and immigration continues, Adelaide metro property growth will just keeping ticking along. For all it's other idiosynchrosies and oddities, Adel metro property will always be a steady performer. As other states have more dynamic peaks and troughs we don't really see that erratic performance in SA (depending on where & what you buy).

For Pete's sake people, forget boom & bust trash media talk, and resources booms etc. Adelaide is just a steady good thing.......take it or leave it.

If you want to punt on massive returns, go to the casino or races.....if you want to invest sensibly for medium to long term then give SA a go!!!

Cheers,

Ian.

 

[Jaggannath]

there's still good value to be had on the south coast, inner west suburbs .. although further out around the Port has been fequently spruked .. i just don't see it ... it's going to take for ever to make the Port a thriving trendy place .. there's just no catalyst ... it needs the americas cup!

Disagree, it's a slow, steady progress. I think 10 years from now it will have improved markedly with all the infrastructure improvements (trams, Defence hub etc.)

 

[Jaggannath]

Forget the boom / bust / surge / resouces explosion media hyperbole dribble. What needs to be considered is a retrospective review going back in excess of 20 yrs and more.

The so called 'boom' SA metro and some rural areas has experienced has only ever been about supply & demand and parity to other states. That's it in a nut shell.......get over any other popular spin you want to put on it!!

Adel metro was always going to 'take off' at some point around the 1999 - 2000 mark as it by default had to follow up behind NSW / Vic / Qld. property markets which were becoming outrageously expensive to buy into.

[snip]

***Note to any SA pollies reading this; it's amazing what you can do by being proactive and supporting development of your state!!! (SA pollies are pissant wowser peons and not worth a pinch of cocky poo.....backwater hicks!!!.....THERE'S NOT ONE VISIONARY AMONGST THEM!!!)......I digress.

[snip]

Look, so long as NSW / Vic / Qld / WA continue to experience price increases, SA will always lag behind but be destined to catch up again. So long as it is still affordable to buy and immigration continues, Adelaide metro property growth will just keeping ticking along. For all it's other idiosynchrosies and oddities, Adel metro property will always be a steady performer. As other states have more dynamic peaks and troughs we don't really see that erratic performance in SA (depending on where & what you buy).

Agreed... I moved to SA from ACT, and when I saw the price of property in Semaphore I knew I had to buy before the price went up. Nowhere else could you buy beautiful beachfront for under $400k. SA started so far behind it has to steadily increase IMO

 

[Deltaberry]

What did you expect from the Western suburbs? Green pastures and spotless white beaches? I don't think anyone is going to argue with you about that

If you don't like Melbourne you are welcome to move to Adelaide. There you can enjoy playing with the dolphins on Kangaroo Island. Victoria will thank you

Well it might not be apparent to people in Adelaide. But here's what Melbourne leaders think of it.

http://www.news.com.au/adelaidenow/story/0,22606,25189927-2682,00.html?from=public_rss

 

[IFBB]

Quoted for truth

"Adelaide is a beautiful city, filled with fine people. I heartily agree when Mr Doyle says "....you could not even compare Adelaide to Melbourne ........", because to that I can only say "Thank God!"

 

[Jaggannath]

Hahaha I love how every time someone in Melb has a jibe at Adelaide, everyone in Adelaide gets up in arms... relax, if you ignore them they go away. Who cares what they think anyway?? (I'm from Melbourne originally, I prefer Melb to Adelaide). I think Michael Harbisons comment is very valid at the end...