New Proposed Infrastructure for Adelaide

[Xenia]

This will be going up on our website soon, but I thought I would share it anyway:


29 March 2007: $250 million complex proposed for Victor Harbor. The South Australia State Government has stepped in to grant major development status to a $250 million project planned for the coastal town of Victor Harbor. Makris Corporation plans a development with cinemas, specialty shops, food court, bulky goods retail, community centre and 60-lot housing estate overlooking Encounter Bay, about 4km south-west of the Victor Harbor town centre. The government move takes the assessment process out of the hands of the Victor Harbor Council.

13 March 2007: Devine move adds to north Adelaide activity. National developer Devine Ltd has bought 13 hectares at Munno Para on Adelaide's northern outskirts to develop 185 homes. This is the latest in a number of moves by residential developers in this precinct, confirming northern Adelaide as a significant growth region - which also stands to benefit from the recently-announced Northern Expressway.

8 March 2007: $870 million power stations planned for SA. South Australia's electricity network will be boosted by two new power stations now in planning. A $350 million gas-fired power station is planned for Redbanks, near Mallala, by Babcock & Brown, while a larger $520 million power station is planned for the state's far north by Altona Resources. They would be the second and third largest power stations in SA.

7 March 2007: $230 million wind farm boosts rural SA. Wind power is driving an economic boom in the drought-hit mid-north of South Australia. Projects such as the $230 milliion wind farm by AGL at Hallet is providing alternative sources of income to local communities (through spending on accommodation, goods, services and wages, as well as providing jobs) at a time when farm incomes are sharply reduced.

27 February 2007: Nuclear power plant planned for southern states. Businessmen Hugh Morgan, Ron Walker and Robert Champion de Crespigny have joined forces to establish a nuclear power plant. Their company, Australian Nuclear Energy Pty Ltd, is researching sites in South Australia and Victoria for the project. It says it has held talks with the Federal Government and the South Australian and Victorian state governments about the proposed plant.

27 February 2007: High-tech precinct reinforces Elizabeth appeal. A $50 million high-technology precinct backed by Playford City Council is being established in Adelaide's northern suburbs. Spearheaded by Priority Engineering Services, ithe Playford Evolution site plans to bring together around 20 companies. Stage one of the precinct, located in the suburb of Elizabeth West, has been sold.

22 February 2007: $2 billion development for northern Adelaide. Developer Lang Walker is the spearhead of a proposed 8000-home development in the north of Adelaide. The $2 billion Buckland Park project will be located between Virginia and Port Gawler, off the Port Wakefield Road about 30km north-west of the Adelaide CBD. The 1,000-hectare site will eventually be home to 25,000 people. Walker and partner Daycorp have also bought 100 hectares of industrial land near the Edinburgh defence precinct in Adelaide's northern suburbs.

29 January 2007: Golf resort unveiled in South Australia. A $250 million golf resort and residential estate is planned for South Australia's Yorke Peninsula. The Dunes at Port Hughes will have 1,650 residential allotments as well as an 18-hole Greg Norman-designed golf course and a 120-room resort. Construction will start in the second half of 2007 and create 600 jobs.

15 January 2007: Wind farm creates 170 jobs. A $200 million wind farm will be built at Snowtown in the mid-north of South Australia. Around 170 construction jobs will be created when work starts in April 2007. The TrustPower facility will generate enough power to supply 60,000 homes.

20 December 2006: Fast-track for $2 billion Adelaide project. The South Australia State Government is fast-tracking plans for a new town of 15,000 on Adelaide's northern outskirts. The $2 billion project proposed by developer Vosporos will have 7,000 homes, a town centre, shopping and commercial facilities on a 1,000 hectare site at Buckland Park near Port Gawler.

20 December 2006: 700ha estate approved at Port Lincoln. A $400 million housing development has been approved for a 700 hectare site near Port Lincoln in South Australia. Allotments with sea views will sell from $82,000 to $185,000 in the first stage.

15 November 2006: Route revealed for $550 million Adelaide road. The South Australia Government has announced the route for a $550 million expressway in Adelaide's north. The 23km Northern Expressway is South Australia's largest road project for 40 years. The four-lane freeway, designed to improve links from the Sturt Highway to Port Adelaide, runs from Port Wakefield Road past Penfield, MacDonald Park, Andrews Farm and Munno Para Downs to Gawler. Construction is scheduled to start in 2008 for completion in 2011.

8 November 2006: SA pulp mill clears environmental hurdle. The $400 million Penola Pulp Mill in south-eastern South Australia has received approval from the Federal Department of Environment and Heritage. The project is planned to be a "sister" mill to the Heywood Pulp Mill, which is just across the state border in Victoria - and which has received State Government approval. Part of the plan is establishment of a 200-hectare river red gum woodland to offset loss of ecological values at the site.

11 October 2006: Steel works expansion major boost to Whyalla. OneSteel will spend $355 milllion converting Whyalla's steel works into the nation's third-biggest iron ore producer, quadrupling production at the plant. The investment is significant for the SA town, which has lost population since the closure of its shipyards in the late Seventies. The project, which includes a new iron ore mine, extends the life at the steel works for another 20 years.

10 October 2006: New town rises from SA desert. A new town is under construction in the South Australia desert and will soon have a population of 800 people. Prominent Hill is being developed as part of the Oxiana open-cut copper and gold mine (the biggest in SA), and will have a sports oval, tennis courts, swimming pool, gymnasium and cycling tracks. Each mine workers will have a room with ensuite and access to cable television.

18 September 2006: Defence plans spark housing boom in northern Adelaide. New homes to accommodate 350 Defence Force families will be built in Adelaide's northern suburbs. The Defence Housing Authority is negotiating with developers and the State Government's Land Management Corporation for the new housing, following Federal Government plans to establish a new army battalion at the Edinburgh military complex in Adelaide's north. The Defence Force also plans to close four other South Australia bases and consolidate their resources at Edinburgh.

05 August 2006: Roxby Downs to double in size. A master pan to double Roxby Downs to 10,000 people will be released soon by BHP Billiton. The plan is designed to cope with the extra workforce needed for BHP's expansion of its Olympic Dam copper, gold and uranium mine.

14 July 2006: Developer to build $50 million homemaker centre in Adelaide Hills. Developer Daycorp will build a $50 million homemaker centre at Mt Barker in the Adelaide Hills. This confirms the area’s status as a growth area. Mt Barker has above-average population growth and its connections to Adelaide City have been revolutionized by transport infrastructure improvements, including the Heysen Tunnels. There are consistent reports that residential rental vacancies in the Hills are virtually zero, which suggests it might not be a bad time to buy a property investment there. Adding further impetus to the general area are plans for a major mining venture at Kanmantoo, not far from Mt Barker.

 

[Xenia]

There certainly is alot happening in Adelaide

Here is some more general information for those interested:

http://www.creativerealestatesolutions.com.au/cgi-bin/page.cgi?id=112

 

[redsquash]

http://www.hotspotting.com.au/index.php?act=viewArticle&productId=39

for more about adeliade

 

[Pushka]

Pity about the lack of water though! Would love to see a desalination plant in there somewhere!

It seems the Government has a lot of money to spend though, doesn't it. I think SA will benefit from the mining boom we are going to see in the next 10 years. Whyalla is a hot spot, and the prices of houses in Roxby Downs are mind boggling for the area.

 

[Jase H]

Xenia,

Thanks for a really informative post re. adealide.

My wife and I own an IP in Smithfield and have another almost built in Smithfield Plains. We are quite comfortable with both investments due the affordable prices and solid rental yields.

It is great to see so much activity in the area.

Funnily enough the April 2007 API gave 12 month % changes in median weekly rentals for all the major cities. Most cities recorded large increases but Adelaide recorded a significant reduction of about 6%. This initially concerned me but I need not have worried. A few days later we received correspondence from our PM re. our Smithfield IP recommending a rental increase from $200 to $210 per week upon expiry of the current rental agreement. We were quite happy with this increase of some 5% (as opposed to a 6% decrease).

Are you able to shed any light on the API rnetal figures for Adelaide?


Regards

Jase

 

[steveadl]

Jase,

Ignore what the statistics are saying about rentals.

I also own up north, my Davoren Park house (2yrs old) I increased in December from $200pw to $210 depsite probably being able to get $215pw (I like the tenants).

The brand new house I have in Smithfield Plains which I bought in August last year I have rented out for $220pw currently.

Both of these properties I will increase the rental again when the contracts expire this year - DP to at least $215pw and SP to at least $225-$230pw.

New houses of good quality are still scarce up North, so the rents are being pushed higher.

Steve

 

[Jase H]

Thanks Steve.

Sounds very promising on the rental front for both of us!

Just wondering what type of properties you have in Dav Park and S Plains?

Our Smithfield Property is about 2 years old 112m2 living plus 20m2 garage 3 Br, 1 bathroom, SLUG, on 392m2 block. (located in gated estate -playford grove)

Our Smithfield Plains Property (under construction) will be 112m2 plus 20m2 garage 3 br, 2 bathrooms, Single covered carport with roller door and 2 separate livings areas. on 375m2 block. (it is a much better used of available space i think compared to the smithfield property) an agent tried to tell us we would get $240-$250 per week which i think is a bit high but i'm sure we should get $225-$230 for it.


cheers

jase

 

[steveadl]

Jase,

In Davoren Park I have a 2yr old house as well built in the newer area behind the council depot off Womma Rd. (My house is in Dartmouth St.) The same area where the new Devine house & land packages are going up for sale a bit further down the road next to the railroad line. As far as dimensions go, you're pushing my memory a bit I think DP is about 115m2 living also, + 2 car garage, on about a 440m2 block from memory - in comparison to a lot of the other new properties around the area, it's quite a decent size block. It has 3 bedrooms, 1 bathroom, and one large living area at the back of house for meals area, and lounge.

The Smithfield Plains house is in the new Erica Linda estate - a small estate just off Peachey Rd. (my house is in Grace Blvd.). This house was brand new when I purchased it in August last year, not yet lived in. This house is about the same size as Davoren Park, maybe a slightly smaller living area in the back, but still has a double inclosed carport under the main roof, 3br and 1 bathroom. The backyard is'nt as big as DP, but was totally paved when I bought it, which tends to suit tenants more these days. The block is 420m2 from memory.

I have done no work at all to SP, however I will probably add a veranda to the back at some stage. At DP I had to remove weeds and rubbish from backyard, then had an instant lawn put in. Total cost of $2000 at the time. I then about 5 months into the tenants first contract added a veranda to the back which they really appreciated.

I am also good to my tenants up there, a few little good will gestures go a long way. When the tennant fitted a security door for me on the front entrance (I paid for the door), I gave him a case of beer. I then gave him another case of beer when I had quantity surveyors go through the house for the Dep. schedule. As well as sending him beer, and her chocolate basket at Christmas. Every report I have from my property manager says they keep the property looking immaculate. (I have never met the tennants).

SP inspections are coming back all good too. I think the benefit we have up there is that with the higher rents we charge for the new houses, we filter out a lot of the undesirables that live in the area.

How are you building in Smithfield Plains - did you buy a block and build, or buy a package? I have just signed the contract on an old property in Elizabeth North, just across the Rail tracks from my DP house. The block is 805m2, and I will be looking to develop as soon as the equity builds up a bit more across my portfolio. It'll be my first time constructin my own.

My plan is to knock down the old house and put a new duplex on the site. How much is your new SP costing you to build?

Steve

 

[Jase H]

Steve,

We bought a block on Coventry Rd, SP for 69k late '06 and signed building contract with weaks and macklin. Not fixed price contract. original price for construction was expected to be 101k (not including floor/window coverings, split system a/c, rear landscaping, dish washer, clothes lien etc). This does include front landscaping and enclosed carport, paths etc.

101k blew out to 112k due to extra site costs, w/tank, and a/c. So total of 181k plus carpets (about 3k), blinds (about 2k), rear landscaping (no sure of what cost will be) and usual incidentals like letterboes, clotheline etc. So total will end up around 190k give or take. i little more than we originally expected but overall we are happy with it. There is another house 2 blocks away which is almost identical design (same builder) which is about fininshed and they are asking 225k to on sell as package which is good to hear. (might be a bit ambitious though). As far as I can make out that price does include carpets, but not rear landscaping, heating/cooling etc.

Anyway we hope to have a bit of instand equity in it once we get it revalued down the track. Also the stamp duty saving was not to be sneezed at (about 4k saving). Howvere, largely offset by no cash flow during construction.

Our tennant is an female student/single mum - not sure if she likes beer! but we bought and had installed a front security door to help her feel safer. Have never meet her but the inspections come back really good and the building inspector we initially used said she seemed nice and kept the house very clean. All in all she is shaping up as a great tennant. rent always paid on time as well. we hold similar views to yourself re. the rent increase to $210 instead of $215 to help keep a good tennant quite happy.

How much did the rear veranda cost re your DP property?

I agree with your assessment of the higher rents keeping the undesirables away. New houses rent at a large premium compared to the olrder 'dog boxes'.

Let me know how your Elizabeth North development goes. That sounds like a good oportunity to me as I know you can get really cheap houses on big blocks around there.

We are also currently having another IP constructed in Point Cook, Victoria (Outer melbourne suburb) which wil be good to have finished and tennanted!

Cheers

jase

 

[steveadl]

Jase,

As far as the rear landscaping goes, I had to remove mounds of dirt, weeds waist high, and have instant lawn put in over i'd say about 100m2 and it cost me $2100 for Jim's Mowing to do everything. (my dad put the watering system in for me though which would cost extra if done by someone else - parts cost me about $200).

My agent now suggests though to only put a smaller area of lawn in, and put bark over the rest of the area, as it is easier for tennants to maintain, and also better with the current water restrictions in SA.

I think clothes line cost me about $150 from memory, which my dad also put in for me.

Yeah sounds to me like you should get a $225-$230k valuation no problem which would work out well for you if you want to buy another IP as soon as building is complete and valuations done.

Yeah, nice to keep tennants happy with lower rent increases, and little things like a couple of free movie tickets etc. at Christmas. Having said that, I don't believe in leaving rents stagnant like one of my mates who has'nt increased them in over 3yrs. No one will move out for a $5 per year increase, as that's only $260pa and in keeping with rents in the area, so they can't really complain.

The veranda cost me $3,500, it was a little more expensive because it had to go around a slight corner in the building - so if you were only putting a rectangular one on the back, it would be less. This was only with shade cloth, not a solid roof. If you have a solid roof you can almost double the price, and you'll have to get council approval, where as shade cloth doesn't need approval. The price was over a year ago now though so may have gone up a bit, but if you want the name of the guy, let me know.

Yes, older houses are less rent which is why this time I am somewhat more concerned with the tennant I get, but as I mentioned, I have an absolutely fantastic property manager up there (again let me know if you want details), so I am confident in her ability to find somone else if she doesn't like the people renting in there currently.

As far as Elizabeth North goes, won't really be able to afford development for at least another year or so I would'nt think. Will be relying on equity build up for construction loan. Which is why I'm a little bit nervous about what the price will be when I finally do get around to building.

Were you able to find any builder willing to do a fixed price build, or do they all only do as Weaks & Macklin?

I've already enquired with Playford Council about the block. The block is 804m2 with an 18m frontage and about 45m deep. So no problems at all with the size of land, however they have said they prefer to have 10m frontage for stand alone houses. So I will probably be looking at a duplex, or possibly units. Will be keeping my eye open if any of the adjoining blocks go up for sale (although I hope not too soon, as I can't afford it yet!).

Had a quick look at Point Cook, looks like a lot of new houses for sale, is it a new subdivision, or old houses being torn down?

Cheers
Steve

 

[Jase H]

Jase,

My agent now suggests though to only put a smaller area of lawn in, and put bark over the rest of the area, as it is easier for tennants to maintain, and also better with the current water restrictions in SA.

This sounds like good advice to me as well, we were thinking about either lawnless landscaping or a tiny amount of lawn plus mulch/gravel etc.

Yeah sounds to me like you should get a $225-$230k valuation no problem which would work out well for you if you want to buy another IP as soon as building is complete and valuations done.

I'm really excited about your views re. $225 plus val. I mean it is one thing to hear an re go on about it (vest interest ect) but to hear a fellow investors views holds more credence with me. (especially since i presume you are investing in your own backyard given your SA location). This really help our equity along. I'll also be interested in the val. on our near new (2yr old) IP in Smithfield which we paid 185k last year.

Yeah, nice to keep tennants happy with lower rent increases, and little things like a couple of free movie tickets etc. at Christmas. Having said that, I don't believe in leaving rents stagnant like one of my mates who has'nt increased them in over 3yrs. No one will move out for a $5 per year increase, as that's only $260pa and in keeping with rents in the area, so they can't really complain.

I think you are spot on here and we intend to do similar re. consistent small rental increases and attempting to keep tennant happy re. keeping property well mainantained with the odd improvement and a few nice extra touches like xmas card, choclates etc.

The veranda cost me $3,500, it was a little more expensive because it had to go around a slight corner in the building - so if you were only putting a rectangular one on the back, it would be less. This was only with shade cloth, not a solid roof. If you have a solid roof you can almost double the price, and you'll have to get council approval, where as shade cloth doesn't need approval. The price was over a year ago now though so may have gone up a bit, but if you want the name of the guy, let me know.

I like shade cloth idea as opposed to solid roof re. no approval etc. If we decide to go ahead with that i'll let you know and get your guys details.

Yes, older houses are less rent which is why this time I am somewhat more concerned with the tennant I get, but as I mentioned, I have an absolutely fantastic property manager up there (again let me know if you want details), so I am confident in her ability to find somone else if she doesn't like the people renting in there currently.

We use a guy from Craigmore R & H who we are really happy with thus so. important to have good PM. who are you using?

Were you able to find any builder willing to do a fixed price build, or do they all only do as Weaks & Macklin?

Actually, my wife corrected me on this one. It is a fixed price contract with W&M. Where I was confused when it was 101K it wasn't fixed price as that was prior to site/soil tests which they allow a PS (prescribed sum), becuase our test came back a bit crappy our site costs blew out about 5k, also we had an a/c supplied and fitted put into the fixed price contract about 2-2.5k (optional - but thought it prudent as used for heating/cooling and no other heating provided in contract) and also the rain water tank (optional - only the plumbing is law but we thought it silly not to put the tank in) at another 2.5k or so.

So fixed priced contract ended up being 112k (which it still is at). Apart from a couple of minor exceptions where they use PS which sometimes they don't need as much but sometimes a bit more. SO 112k fixed plus 69k land plus carpets, blinds, rear landdsc. at our cost.

Had a quick look at Point Cook, looks like a lot of new houses for sale, is it a new subdivision, or old houses being torn down?

Point Cook is a new subdivision about 25k West-South-West of Melbourne. I was down there around 3 months ago and was pretty happy with what i saw. We bought an entry level 2 br plus study cottage style place on a block of 320m (small i know!) where we are is now largely built out with no blocks left for sale at the price we paid 115k (expensive compared to northern adelaide but very cheap compared to outer new homes areas in canberra 185k!)

Lots of parks, a wet lands area, walking tracks etc, child care centres, a planned 90 shop town centre, schools already in place and a planned train station, also close (but not too close to main highway b/t melb and geelong) As a said 115k for land and fixed price contract of 136k for house so 251k total. (house is a lot more than adeilade one due to quality inclusions such as 9 foot celings, ducted gas heating, 30 degree pitch roof, period home weatherboard facade at front, carpets included, coloured concrete driveway etc)

Cheers

Jase

 

[steveadl]

You can go lawnless which will be easier to maintain, and less water etc. However keep in mind this may cut out some of the possible rental market with small children. Families with young kids like lawn.

Incidently, I also allow my tennants to have pets (ie. dogs), what about you? Haven't had a problem with it in the past, although at the moment neither house has a dog.

Well as far as the values go, I'm having valuations done on all my properties next week, so will let you know how they turn out. I'm hoping for about $210-$220k on DP, and with any luck $225k on SP. Although my lender at the bank (also my best mate which helps!) said that the valuers are being a bit more conservative at the moment, so fingers crossed.

My PM up north (I use LJ Hooker Craigmore/Elizabeth - very happy with her) says DP is good, but SP is a different story, that area has performed really well last 9 months or so since I bought last. I told her I was interested in looking at new houses again in SP and she said it's gone up considerably since Aug 06. Which is why I have opted to buy and old house instead for the land value as I mentioned.

Good to know it was a fixed price contract, but I'll still have to wait a while as I'll be needing to build 2 side by side. I'm actually hoping to find a way to fit 3 residences on the block, whether they be units or something else. Problem is I think I may be pushing it. Which is why I think at the moment my first priority will be to buy a neighbouring block as opposed to building on existing. If I can pick up a neighbour, then I should have no problem fitting 5 or so units on it. When I get further down the track, may even find out councils views on blocks of units ie. 3 below, 3 on top. But I think that may require rezoning, so may be a bit beyond me. All else fails, have to try and convince my brother or someone else to buy next door and jointly develop.

Point cook sounds quite interesting too. A few developpments like that out this way too, my parents bought out at Springbank Waters at Burton, which is quite a nice development - probably not as big, but they've won awards for best new development etc, and you can still pick up new houses for $230k mark.

Also at Northgate next to my PPOR, the last decent sized land has just been sold by the Govt. They've started cutting out the first road last week, but the block prices will only be starting at $190-200k+ and the biggest block is going to be 375m2. Because it is the last decent size land available close to the CBD in Adelaide (ie. 8km), the Govt has marked it for higher density housing. I was speaking to a valur yesterday and the plans include a big retirement village, and possibly even 3 storey apartment complexes (which I believe is common interstate but virtually unheard of in Adelaide suburbs). It's being progressively developed over next 5yrs until 2012, at which point they will be relocating Yatla prison on the other side of Northgate from me, and that land will then be subdivided. The land next to the prison (Walkely Heights) was initially sold at $80k when my mate bought a block, and when he sold it a year or so later back in 2005 they got $185k.

One tool I have found invaluable when it comes to property inveting is Google Earth. If you have it, let me know, and I can give you the co-ordintaes of the new development, sounds like the sort of thing you may be interested down the track if you want to buy land in Adelaide closer to the CBD. No doubt it will perform well over the next 10yrs, but it's out of my price range.

Cheers
Steve