A spring in Adelaide’s step
It may be ranked as Australia’s most liveable city, but does Adelaide cut the mustard as an investment destination?
According to the Property Council of Australia’s My City: The People’s Verdict poll, Adelaide has claimed the title of Australia’s most liveable city for the third consecutive time.
Property Council chief executive Peter Verwer says the survey, which canvassed opinions from almost 6,000
people across the country, demonstrates how important it is for government leaders to focus on improving and delivering services such as education, a vibrant cultural scene and recreational outdoor areas.
“Australians want more liveable cities, and they know that the performance of our cities is critical for our future economic prosperity,” he says.
Adelaide’s liveability endorsement is more good news for a city where local real estate agents are finally beginning to report a more robust buying and selling market. RP Data figures appear to back up anecdotal evidence of market conditions improving, with quarterly growth rates of 2.6% for houses and 1.4% for units.
“Our members are saying that the first few months of the year have started to show some promising signs that housing stock is starting to move, and low interest rates are no doubt an important factor in purchase decisions,” explains Real Estate Institute of South Australia president Greg Moulton.
“After a tough few years, it is good to see a spring in the step of the market. While the recovery won’t be overnight, incremental increases in volume is what is needed to boost the market.”
Regional markets set to perform?
Deloitte Access Economics described the Olympic Dam project – well before it was delayed or shelved – as being the ‘make or break’ issue for the whole of South Australia.
“While this has been proven to not be entirely correct, there is no doubt that the decision by BHP to delay development of this massive resource has restrained short-term growth,” says Andrew Peterson of NextHotSpot.com.au.
“Ironically, the delay has prompted action that makes the long-term future appear more secure – Rio Tinto has started exploring the Vulcan site virtually next door to Olympic Dam,
and the SA government has opened up the Woomera area for resource exploration – but the benefits are some way off yet.”
This is because exploration and research take time. The process to begin construction, let alone see production benefits, is likely to take many years. “I think long-term it’s almost certain that these projects are going to come to fruition, and that will boost employment, put more money into the economy and drive growth,” Peterson adds.
“The resources are there, but the actual process to get to them means the benefits are probably some way away. It’s a bit of a stalled, wait-and-see prospect.”
Eyes on the Eyre Peninsula
Still, investors should not disregard the potential of South Australia’s resources just yet. Residex founder John Edwards believes SA’s regional markets are set to perform ahead of the capital city.
“Notwithstanding that you’ve got the resources boom coming back, regional markets are still growing. The Eyre Peninsula in South Australia is well worth watching,” he explains.
“Although we may have had some bad news with BHP stalling on Olympic Dam, I won’t be surprised to see South Australia come through quite strongly, because there’s some very good resources in the state. Adelaide will come back later, but I think the Eyre Peninsula is definitely worth watching right now.”
In Roxby Downs, the town that was gearing up to provide accommodation and services to those people employed by Olympic Dam, house values are stable at $455,000 and median rents
remain strong at $510 a week.
Even in ‘sluggish’ Adelaide, things are improving, Edwards concedes. “I’m a little cautious about where we’re at – I think it’s too early to say we’re definitely going ahead, but the housing market is getting up off its feet,” he says.
Home to many schools, heritage-listed pubs, shopping facilities, restaurants, as well as the Women’s and Children’s Hospital and the Memorial Hospital, there are plenty of local employment opportunities.
The added benefit is that the suburb is a stone’s throw from the CBD.
While it is possible to locate fine, well-preserved period homes in the suburb – from Victorian estates through to Federation or bungalow-style properties – you’ll pay a tidy sum to do so, with median house values climbing towards the $1m mark.
Your better bet is to investigate the apartment market, where a median price of $507,000 is not only more affordable but also holds wider appeal with young professionals and couples wanting easy access to the city.
Best streets: A section of the suburb occasionally referred to as Upper North Adelaide appeals largely to young professionals, families, singles and couples alike – with several local schools, Wellington Square at its core, and easy access to the cafes, restaurants, bars, shops and pubs thatline O’Connell Street.
Can you afford to buy in this suburb? Find out how much you can borrow