Margaret Lomas's love affair with Adelaide.
- Thread starter INXS
- Start date
CJay is making a very good point here. The data is out there for everyone to crunch their own numbers but if you look at the past 2 years (value drop period), past 5 years, past 10 years and the period 2003 to 2009 (peak to peak) you'll find that the blue-chip ADL areas have not necessarily, on average, outperformed the outer suburbs. It's bit of a myth that Parkside or Unly will always outperform Morphett Vale. Not sure about Devoren Park though
Having said that, always look at the individual properties, not just statistics. And in addition to quantitative, always look at the qualitative aspects, for example the easier life / less trouble as mentioned by singingtheblues.
Keep laughing, Paul
I think a few are missing the point I was making. I wasn't disputing Elizabeth's past growth I was just questioning its future prospects. To me I think there are suburbs in Adelaide that might cost around 400k compared to 200k but in 10 years I can see the prices looking more like 1 mill vs 350k
Just saying- look at Melbourne / Sydney prices outer suburbs about 350 inner easily 1 million
Elizabeth will be an outer suburb for a long while yet
So you think that in 10 years you think 150% increase in the inner Adelaide compared to 75% in the outer, what are you basing this on??? Sydney and Melb???
The problem I have with the areas of Elizabeth that are predominantly duplexes are the majority are now owned by Investors.
Very difficult to be redeveloped unless both are owned by the same owner. Also because the majority of the owners being investors, very few will get extensively renovated, just maintained, so the areas appeal will not be enhanced. It's like the chicken or the egg. The investors wont redevelop the land or renovate the property until the growth is there, but the growth wont happen because it's not being redeveloped or renovated. You could compare it to an apartment complex filled with only tenants with no owner occupiers.
Also my believe is the growth will be a long time coming as when the State government recently moved the urban boundary, loads of land was released just a little further north and there is plenty more of it too and with developers now competing with the Playford Alive Development and the affordable homes program, very few first time buyers will be looking to buy established homes in the older areas, as the prices of the new homes are just so cheap and heavily subsidised. This will drive the prices down in the short term.
I believe the growth will happen in the duplex areas of all the Elizabeth's but not in the short/medium term.
Very difficult to be redeveloped unless both are owned by the same owner. Also because the majority of the owners being investors, very few will get extensively renovated, just maintained, so the areas appeal will not be enhanced. It's like the chicken or the egg. The investors wont redevelop the land or renovate the property until the growth is there, but the growth wont happen because it's not being redeveloped or renovated. You could compare it to an apartment complex filled with only tenants with no owner occupiers.
Also my believe is the growth will be a long time coming as when the State government recently moved the urban boundary, loads of land was released just a little further north and there is plenty more of it too and with developers now competing with the Playford Alive Development and the affordable homes program, very few first time buyers will be looking to buy established homes in the older areas, as the prices of the new homes are just so cheap and heavily subsidised. This will drive the prices down in the short term.
I believe the growth will happen in the duplex areas of all the Elizabeth's but not in the short/medium term.
Ok Brady why don't you compare it to Perth as the population is closer.
Compare the price of any inner suburbs or beach/ river suburbs with those that are 25km from the CBd with no river or beach nearby. Simple comparison
Kelmscott is 29km from Perth with a median price of 360 and weekly household income of 950 (not exact)
North beach is 17 km from Perth with a median of 900 and household income of 950 (not exact)
The premium that north beach has is because of its location.
Point of the story is if you can buy in Adelaides future north beach for 400,000 then why buy in the Adelaides future Kelmscott for 200,000?
For what it is worth Elizabeth's household income is about 500 odd a week so rents don't have much scope to increase so yields will stay the same which as ekwatee suggested was a major cause for the recent growth
I question that comment too.
I live and have been a home owner in the inner city of Adelaide, and had/have 2 IP's in the north in the last 28 years and my experience is CG does not favour inner city over those older outer suburbs - not in Adelaide anyway.
I've had great tenants too apart from 1 couple who were druggies, but even they always paid their rent on time and didn't trash the house - just left some mess and the stuff they did not want to take with them when they did their runner.
Presently I have a tenant that has only paid their rent on time once, because they always pay early
.My best tenants who not only paid on time and looked after the place better than I look after mine, were both disability pensioners in their 20's, who btw moved there from Semaphore Park because they could afford a nicer place for the same $ further out.
I think the only time half decent tenants become scarce is when a place is in really bad condition and the immediate neighbourhood unsafe, which is definately NOT all of Elizabeth and surrounds.
Many parts of DP are like that but are in the process of slowly being knocked down and replaced AND the numbers stack up, hence the interest to buy there in most cases.
I question that comment too.
I live and have been a home owner in the inner city of Adelaide, and had/have 2 IP's in the north in the last 28 years and my experience is CG does not favour inner city over those older outer suburbs - not in Adelaide anyway.
I've had great tenants too apart from 1 couple who were druggies, but even they always paid their rent on time and didn't trash the house - just left some mess and the stuff they did not want to take with them when they did their runner.
Presently I have a tenant that has only paid their rent on time once, because they always pay early
My best tenants who not only paid on time and looked after the place better than I look after mine, were both disability pensioners in their 20's, who btw moved there from Semaphore Park because they could afford a nicer place for the same $ further out.
I think the only time half decent tenants become scarce is when a place is in really bad condition and the immediate neighbourhood unsafe, which is definately NOT all of Elizabeth and surrounds.
Many parts of DP are like that but are in the process of slowly being knocked down and replaced AND the numbers stack up, hence the interest to buy there in most cases.
I hear what you are saying Weg. How long do you think Adelaide will remain this way? Forever?
Everything changes and if your looking forward you'll benefit the most
Till there's a MEGA influx of people coming into the state, or when mining takes off like the clappers and changes the face of Adelaide it'll probably chugg along much like it has.
What you forget is most people who are raised in an area don't venture far from where they are raised. That definately applies to those suburbs while there's ample work and good facilities.
Most there wouldn't entertain the idea of living inner city, let alone be actively striving to get there, which is why you see gentrification and new estates pop up around the place.
There are also people like my ex tenants who sometimes move there as well -neighbour of an IP retired there from Ingle Farm
.I'm of the opinion there is not a glut of land out there unlike some of the 'cheap' regionals of similar demographics, many who have seen poorer growth than Elizabeth.
Anyway, if the 400K property stacks up better than the 300K one further north, based on yield of course you'd go for that, but if it doesn't and you buy it anyway on the 'prediction' that many moons down the track it might experience more growth, then you'd still have to do your sums to see if you really are that far ahead.
One place I bought out there some years ago cost me 30K which I sold 3 years later for 54K.
Brother bought 3 semis, some time after me for high 20K's (all in the same day unseen) and sold 2, 3 years later for around 55K, and the third a few years after that for 75K.
That growth has been on par with inner city, so even if it did 'chugg along', if that easy entry point gets you into the market that otherwise wouldn't allow you to, and you still experience good growth (just less than inner city) then that's still a good investment.
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Why compare it to another state in the first place?
Also again not sure where you pull the stats from 500 a week for household income. http://www.sqmresearch.com.au/graph.php?postcode=5112&mode=4&t=1
Shows family income @ ~$900p/w yes lower then the average states household income, but at same time prices are alot lower in comparison.
I was comparing it to Perth because of a similiar population and I also think SA has much mining potential which will be sooner than later.
I understand that people want to stay where they were born but as a city's population increases this changes. Better opportunities will in the city and increased population means people will want to live closer for work.
I agree that this not the current situation Brady but it will go the same way as all the other larger Australian city's.
Income was pulled from the 2006 census. Should of looked up 2011 but it's not that relevant anyway
10% of the population work in the CBD. On top of that, 20k people live in the CBD and population forecasts are putting the CBD population at 40k in 20 years, which would provide a lot of accomodation for CBD workers.
Adelaide is quite decentralised, as it's seen as 'regional' by national companies, there are not many companies which bother to put State offices here, as they can piggyback SA off their Melb/Syd offices.
I just can't see the pull towards the city, my experiences with people are similar to that of Weg - They like to stick to where their families are from and don't even consider outside the bordering suburbs.
Agreed, you would find that many don't even travel into the city unless required.
I know of people who have moved here for work, to be the head of SA for a particular company... who still haven't gone into the city yet after being here for 2 months. They haven't had a need and Adelaides CBD doesnt have that many tourist attractions compared to say the Wine Valleys in the outer and beaches down south etc
Brady I live in Melbourne and I hate going to the city as do many others. However inner city prices have skyrocketed in the past few years just look at Richmond
It's only a matter of time before attitudes change in Adelaide, why not get in why you still can
Because I dont think attitudes are going to change.
strongy, prices have ALWAYS been higher closer to the cbd and always will be, wherever in Australia.
Adelaide does have very expensive inner city properties now BUT these properies are not anything like DP properties. They are not 300K type of properties and were never that 'cheap' to start with (the home I live in now was never a first home buyers or a 'working class' persons home ever!).
Your 300K (more like 350K -double that of the north- if you're lucky) inner city house is usually not that much inner city, is basic and usually run down, and doesn't necessarily command a higher yield, so holding costs would have to be calculated in that final selling figure (possible opportunity cost for holding too).
Some of the 'cheaper' inner city properties are either a knockdowns, or you put in students to get the better yield, or you NG.
It's one way of going about it, but not necessarily the best if you're holding on and waiting tied to one or 2 expensive NG properties.
Adelaide does have very expensive inner city properties now BUT these properies are not anything like DP properties. They are not 300K type of properties and were never that 'cheap' to start with (the home I live in now was never a first home buyers or a 'working class' persons home ever!).
Your 300K (more like 350K -double that of the north- if you're lucky) inner city house is usually not that much inner city, is basic and usually run down, and doesn't necessarily command a higher yield, so holding costs would have to be calculated in that final selling figure (possible opportunity cost for holding too).
Some of the 'cheaper' inner city properties are either a knockdowns, or you put in students to get the better yield, or you NG.
It's one way of going about it, but not necessarily the best if you're holding on and waiting tied to one or 2 expensive NG properties
.Agree with others
I think Margaret Lomas is likely to have done more extensive due diligence on the Adelaide market than perhaps others have had the opportunity to, and she has probably identified areas where solid rental return opportunities are abundant.
I understand also that Margaret holds a portfolio across most states and territories so I think the focus on Adelaide specifically in recent times is an indication she feels that there is strength there currently.
Cameron McEvoy
I think Margaret Lomas is likely to have done more extensive due diligence on the Adelaide market than perhaps others have had the opportunity to, and she has probably identified areas where solid rental return opportunities are abundant.
I understand also that Margaret holds a portfolio across most states and territories so I think the focus on Adelaide specifically in recent times is an indication she feels that there is strength there currently.
Cameron McEvoy
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Who ever she is she will be excited Adelaide is the most "live able city " in Australia ATM...
If that means anything
http://www.dailytelegraph.com.au/ne...-liveable-cities/story-e6freuzi-1226310242708
