Prices in Elizabeth

[hugh72]

I have been looking join the club and purchase in Elizabeth north/Downs or East and have noticed a lot of the free standing houses in the lower price ranges seem to be listed at prices lower than they sold for 4-5 years ago? Is this a correct observation?
Why?
Surely the people working at Holden wouldn't live there?

 

[Corey Batt]

There was a massive boom in prices of up to 20-30% over a 18 month period which then corrected with the coinciding GFC - this is why you see houses selling for a lot less than just a few years earlier. Nothing to do with Holdens imho - written about this a 1,000 times on here to date so I won't rehash.

I remember at the peak a lot of Elizabeth houses selling at yields <5%, far below trend and a price correction naturally was needed.

 

[D.T.]

Hi Hugh,

Yes, your observation is correct. Some of my purchases have been for the same or less than what the vendor originally bought it for. It's mostly because that was at the peak and it's now in the valley. Great opportunities abound!

Not really anything to do with Holden. The employees there are on pretty good salaries and therefore live in much more desirable areas.

 

[DaveM]

Market has dropped. Is current moving again.

Holden workers generally earn good money and tend to live further south eg Salisbury, Paralowie blah blah.

 

[hugh72]

Thanks don't mean to cover old ground but things can change quickly, looks like BN market to me in that regards as it grew strongly in 2007 and early 08 before getting smashed by GFC and Floods etc. I agree yield is a good indicator of where a market is at in its cycle IMO.
I prefer to buy in a cool/ lukewarm market anyway as you can make better decisions without feeling pressured and keeping emotions out of it. sub 5% yields at the lower end I think is an indication where a market is at, There is lots of stock yielding 7%+ currently.

 

[Corey Batt]

Thanks don't mean to cover old ground but things can change quickly, looks like BN market to me in that regards as it grew strongly in 2007 and early 08 before getting smashed by GFC and Floods etc. I agree yield is a good indicator of where a market is at in its cycle IMO.
I prefer to buy in a cool/ lukewarm market anyway as you can make better decisions without feeling pressured and keeping emotions out of it. sub 5% yields at the lower end I think is an indication where a market is at, There is lots of stock yielding 7%+ currently.

There has been a lot of upwards pressure compared to the bottom, but we're still at early days. At the absolute doldrums there was freestanding dumps on 800sqm selling for 100k, now people squabble over uninhabitable 150k houses. A lot of the quality freestandings are starting to edge 200k and higher, but there is reasonable supply of the 160-180k houses. Rent's have gone from strength to strength, so the yields are still keeping track.

Discounting off advertised price is still the norm in the area, so I see a lot of purchases come through upwards of 9-10% by savvy negotiators.

 

[hugh72]

Thanks Guys, interesting to note some of the discounts....negotitiating is not my strong point. I have a theory that LJ Hooker tend to list higher than others and have more room to move depending on the vendors motivations. I might be wrong but it seems to be common at least in Qld. RW seem to be the main player in the area though.

 

[2FAST4U]

https://www.sa.gov.au/topics/housin.../metro-median-house-sales-statistics/playford

Prices are based on free standing houses.

 

[2FAST4U]

There has been a lot of upwards pressure compared to the bottom, but we're still at early days. At the absolute doldrums there was freestanding dumps on 800sqm selling for 100k.

Now it's pretty much impossible to find anything for sub 100k. 'Renovator delight' mansionettes on smallish blocks are typically asking for 110k.

 

[Corey Batt]

Now it's pretty much impossible to find anything for sub 100k. 'Renovator delight' mansionettes on smallish blocks are typically asking for 110k.

Indeed the market has moved quite well for those who bought during the slump, but there's still quite a long way to go before the yields are anywhere near the rest of Adelaide metro. Currently property values across the 5112, 5113, 5114 (Smithfield) areas are still hovering below 200k medians, which is less than 50% of the Adelaide median.

 

[HappyCamper]

Discounting off advertised price is still the norm in the area, so I see a lot of purchases come through upwards of 9-10% by savvy negotiators.

Hi Corey, are most of these semis and in the less central parts of Elizabeth?

 

[Corey Batt]

Hi Corey, are most of these semis and in the less central parts of Elizabeth?

Not necessarily. Semis are a lot easier to pick up at higher yields as there is a negligible owner occupier percentages, but you can certainly still achieve the same numbers if you know what to look for. Generally this may require some work, which may be as little as an essential repair which isn't allowing a normal sale (broken HWS/damaged kitchen/damaged bathroom tiles).

As to 'less central', I don't think I could really count any section of Elizabeth as not central - most sections are within 5 minutes of the centre + train stations.

 

[D.T.]

Hi Corey, are most of these semis and in the less central parts of Elizabeth?

Yes, semis do typically have better yield but I still won't buy them. Too risky for me as anything can happen to the other side which brings down the value/rent on your one.

Not necessarily semis though. Most of the time its from buying under market value and/or renovating to boost the rental.

For example one of mine was advertised at 185K, bought it for 147k and it rents for 250/wk (spent $3K on it), which puts it in the 9% ballpark.

 

[Logica]

Thanks Guys, interesting to note some of the discounts....negotitiating is not my strong point. I have a theory that LJ Hooker tend to list higher than others and have more room to move depending on the vendors motivations. I might be wrong but it seems to be common at least in Qld. RW seem to be the main player in the area though.

Each agent has their own style and there are also "seasonal" and market demand driven changes.