Reply: 1
From: Sim' Hampel
On 11/2/01 7:52:00 PM, Ian Parham wrote:
>'Evening all.
>
>Duncan (and other interested
>parties)....I enquired today
>(from Sydney) how a Brock
>Partners auction of a Public
>Trustee listed pair of
>maisonettes, at Edwardstown
>just off Daws Rd, went on
>Tuesday.
>
>It was advertised as 'Low
>Hundred K'...so I thought
>maybe 115 to 130K perhaps.
>Well the agent told me that
>the bulk of bidders dropped
>out at 140K and it was left to
>two others to slug their way
>to 174K!!! I couldn't believe
>it (I've been away from Adel.
>for 5yrs).
I saw the ad for that place. Doesn't surprise me for Edwardstown. Places were probably dumps too.
>I know you have posted
>previously about having lower
>priced IPs in your portfolio
>eg Reynella. I was curious if
>you have dabbled in ex Pub Tr.
>properties also? I had
>considered pursuing this
>avenue in an attempt to get
>some +pos IPs together...but
>maybe the Pub Tr properties
>are getting out of this
>territory now the 'Agents' are
>carrying them all??
Agents use Public Trustee purely as a marketing strategy these days. Many people (mistakenly) believe that if a property is for sale by public trustee then it is a "will sell no matter what" deal, and a possibility for a bargain. Agents know this and so market the property accordingly.
Unfortunately in such a heated market like Adelaide has been experiencing for the last 12 months or so, there are just too many buyers for such a property to sell at bargain prices. Even with agent lowballing the price to attract attention, just means auctions take longer
My advice is don't attempt to concentrate on Public Trustee auctions in search of a bargain (at least not in the current market), you will be wasting your time.
>I would also be interested in
>your thoughts on Adelaide
>market currently, particularly
>Warradale, Oaklands Pk,
>Marion, Edwardstown, Glandore,
>Black Forest, Plympton
The suburbs you listed fall squarely in "my area" (so stay away !) ;-)
I have watched in glee as prices in Colonel Light Gardens have skyrocketted in the last 12 months (we own there) as well as horror as suburbs like Edwardstown and such have followed close behind (damn ! missed out !).
There has been a gentrification process happening in a lot of these suburbs, especially in the suburbs with a significant number of character cottages and bungalows. Unrenovated houses are selling for as much as renovated ones, and Bunnings and Mitre 10 are going a roaring trade.
My mother propogates Australian native plants and sells at some of the plant shows that are held at the Adelaide showgrounds every couple of months. The recent show was incredibly successful, even more so than the same time last year. Apparently when talking to a lot of the people attending the show, many claimed to have just bought a house and were looking to do up the garden a bit.
Now suburbs a bit closer to the city (like Black Forest) are becoming very expensive - much like Forrestville.
Suburbs like Marion and Oaklands Park are a mixed bag. The character homes are selling for ridiculous prices. The rest are only selling at absurd prices.
I've been watching the market in that area closely for quite some time, including several weekend visits to look at property and even a week long visit at the beginning of September.
I came away rather depressed when I attended an auction for a "cute little 2br cottage" in Mitchel Park (just a couple of streets back from the corner of Marion Rd and Daws Rd). It was a small house (about 85m2) on a small block (about 300m2), and was advertised at around $90K. There were upwards of 100 people at the auction and the bidding came down to several 20-somethings with parents in tow looking to secure their first house. I'm sure mum and dad were putting up the deposit money for them too (with a lot of help from the FHOG). The slug-fest ended with one of them paying about $129K for the house.
I have seen similar at other auctions... places where the bidding just doesn't stop. South Plympton, character bungalow in need of LOTS of work, my estimated value $160K, bidding starts at $170K and finished at around $230K.
Basically, because the house prices in Adelaide are relatively low, the First Home Owners Grant has had a huge impact in house prices. In the areas you mentioned, it is virtually impossible to get a decent house for less than $200K now, whereas $150K bought you something decent 12 months ago.
Funnily enough, I haven't seen the upper end of the market move quite as much as the lower end, so there is a lot of choice in the $250K-$350K range closer to the city.
>with regard to next growth cycle in
>however many years time this
>may be.
Umm... now is NOT the time to be buying in these areas. They have moved dramatically already. A lot of that movement was correction for many years of poor growth, fueled by the FHOG and general "gotta buy property" mania. Yes, I think there will be a bit more movement, but I don't think the prices being paid are justifiable right now.
Of course this is only my opinion, and I may be completely wrong !
>I did snaffle a copy
>of the Sunday Mail two weeks
>ago and scanned through the
>centre spread lift-out of
>suburb by suburb growth for
>the year....very
>interesting...the likes of
>Warradle and Daws Pk have
>followed on from Col Light
>Gdns etc and gone ballistic.
Yes they have.
>Anyone with any opinions,
>thoughts, observations on
>Adelaide market please hop in
>with your 2 cents worth!
Interestingly enough, I don't think units have moved anywhere near as much as houses have. Houses are definately still in demand in the inner southern suburbs of Adelaide.
Also note that there has been a lot of small scale development in these areas... due to the huge block sizes and old houses, many have been subdivided for homettes/maisonettes or simply build a second house down the back of an existing one. I think this is one of the reasons units haven't gone as well... there are many low maintenance style dwellings (homettes / maisonettes) that are much more spacious and comfortable than your typical unit.
I'm still buying in Adelaide, but there are very very few bargains to be had in the areas you listed. My opinion is that the market will slow down dramatically within the next 6 months, and we will see some negative corrections in certain areas that have over compensated in their price rises.
My opinion is that if you are prepared to buy and hold long term within 10km of the CBD you should do okay and get maybe 5-7% growth on average. If you want an opinion on anything further out than that (south), you'll need to get Dunc's opinion ;-)
Michele_B's area overlaps with mine a bit (to the north), so if you want opinions on the innermost southern suburbs and the CBD itself, you'll need her! MB ?