Transactions are down but the cranes are up as Adelaide – recently voted Australia’s most liveable city for the second year running – appears best suited for long-term investment
Most recent coverage on the South Australian market has been on the progress of the Olympic Dam project. However, this month the focus is on Adelaide and the exciting developments in the CBD. While transactions are down across the state at 27-year lows, there are nevertheless plenty of signs for growth and rejuvenation into the future, especially in the capital.
South Australian Treasury figures show the number of conveyance duty transactions for the 2011/12 financial year up to March were 42,000. This is 3,000 less than the same time period 27 years ago in 1985. Anthony Toop, of Toop & Toop Real Estate, cites a combination of several reasons for the lagging numbers. “Properties priced incorrectly, or priced according to the heady days of 2007, are not selling as a rule at all,” says Toop. “There are a record number of properties on the market but very few new releases, and very few serious sellers amongst them. It’s not a function of buyers; there are plenty of buyers out there.”
Other factors have contributed to uncertainty and ultra-discerning buyers, according to Toop.
“With the introduction of the GST we noticed that things stalled, and we’ve had the introduction of the carbon tax and until that’s actually in, I can’t see any change in the mood.”
Fears, only recently subsided, over the US and EU economies, along with the non-event after expected interest rate drops in February and March, mean that Adelaide still faces a fearful and stagnant market, according to Toop.
Australia’s most liveable city
Despite the current woes in the property market, Adelaide was recently awarded the title of Australia’s Most Liveable City for the second year running. According to Robert Ford of Ray White South Australia, efficient transport was especially important to Adelaide residents. “We don’t have the sort of bottlenecks or congestion that you might have in other cities, which makes it very easy to get around,” he says.
“A lot of the focus (of the government’s proposed 30-year development plan for Greater Adelaide) is based on what they call the TODs (transit-oriented development). Properties close to these main transport corridors are pretty safe long-term investments.”
It isn’t just areas on the fringe of the city that are showing signs of long-term growth. Perhaps the most encouraging signs for development are closer to the CBD. “There are a lot of cranes in the sky in Adelaide,” says Toop. “Basically Adelaide will look like a different city in four or five years’ time,” when redevelopments of the Riverbank, Adelaide Oval and the Royal Adelaide Hospital are complete.
The government initiative reclaiming old industrial land at Bowden will create an exciting new urban village.
“Bowden Village will be Adelaide’s first planned, high density, walkable community,” says Nathan Paine, executive director of the Property Council of Australia (SA division). “It will soon become a beacon for homebuyers and investors attracted to the appeal of new suburbs with inbuilt amenities. It will be easy to get around on foot, it’s close to the CBD, it’s surrounded by parks and it’s close to jobs – it just makes sense.”
Recent CBD planning law reforms made by the South Australian government aim to deliver a greatly reduced development application process, as well as greatly increased height limits for residential and mixed use developments. “The number of developers in the inner-city area that have started to put their hat in the ring for new multi-level residential developments has been quite staggering,” says Paine. “While times are tough, there’s no question about that, there are certainly bright sparks on the horizon.”
Toop believes the market in the blue-chip South Australian tourist destination, roughly 90km south of Adelaide, has been “absolutely stone-cold dead, but the mining people are a very big source of demand for the whole south coast.” He adds, “we believe that there will be an absolute surge of activity down there over the next decade; it will be the best find you’re going to see down there over the next 12–18 months.”
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