Adelaide rents on the rise
Adelaide’s property market may not be booming to the degree that its counterparts to the east have experienced in recent years, but the South Australian capital is trending in the right direction.
For landlords, in fact, the returns on offer in Adelaide make this city worth a second look. Both houses and units in Adelaide’s metro area are performing well in the rental market, recording an increase in median weekly rents in recent months.
If anything, it’s the regional market that is dragging the state’s statistics down: the median weekly rental rate for houses across all of SA is moving in a sluggish direction.
Gross rental yields have also remained stable in Adelaide, and CoreLogic notes that property values are rising, albeit slightly. This increase may be attributed to limited stock causing growth in demand, according to Herron Todd White in its Month in Review report for September 2016.
Following the implementation of zoning changes across several areas in the metro, including Campbelltown and Tea Tree Gully, more buyers are going for apartments and townhouses.
By contrast, suburbs on the fringe of the city, such as North Adelaide, Prospect, Norwood and Unley, tend to be selling more villas and cottages. One thing these areas have in common, however, is the prevalence of infill developments.
Buyers are also looking to breathe new life into older properties by refurbishing them with modern amenities, especially given the low demand for older apartments due to the influx of newly constructed units and townhouses.
Adelaide buyers stay close to city
For buyers who prioritise work-life balance and time with loved ones, homes located near the CBD are becoming more prized.
“Quality housing in suburbs within 10km of the CBD has always been attractive to long-term investors and this is the same for home owners,” Herron Todd White states.
“Given the increasing townhouse and apartment construction in the CBD and surrounding suburbs, potential purchasers in Adelaide are gradually moving away from large detached dwellings, particularly in less affordable locations.”
From an investment perspective, central suburbs of choice may include those in and around the CBD, such as Brompton and Renown Park.
Such areas provide good access to the city, shopping options and dining establishments, although their proximity to these amenities means the supply of properties priced under $500,000 is quite limited. Hence, buyers looking for more affordable dwellings may need to look beyond the metro.
Fringe suburbs offer value
The difference in price between a home within the CBD and one at the city fringe can be quite stark.
For instance, the median house price in Woodcroft is nearly half that of suburbs closer to the CBD. And the suburb of Happy Valley, located 17km south of the Adelaide CBD, is getting a boost in value due to infill development.
Despite their distance from the city, these suburbs provide convenient access to public transport and amenities for residents. They also offer first home buyers the opportunity to get into the market, featuring detached housing that is fairly close to the CBD while being priced within the $300,000–$400,000 range.
Such areas see steady demand from tenants as well, particularly young families aiming to get a large house with adequate open space for children at a reasonable cost.
Other well-served suburbs near the coast are also sure to remain strong markets, including Henley Beach and Grange, because of their closeness to the beach, their accessibility, and the availability of recreational facilities.
SUBURB TO WATCH
Woodcroft: Affordable fringe suburb a treat for investors
Thanks to the implementation of new development initiatives, Woodcroft is seeing growth potential in its future. Its house market has been on a consistent upswing since 2013, and rental yields are highly favourable at 5.1%.
Woodcroft has an excellent central location that is near both the city and the beach while being in the midst of a strong network of suburbs. Adelaide is approximately a 30-minute drive north, while the southern beaches are just 20 minutes away. Woodcroft Primary School will appeal to families with young children, while older kids can enrol in one of the many nearby secondary schools zoned to Morphett Vale
The suburb is served by buses running all the way to the CBD. Those who wish to travel by train need only head over to Lonsdale, which is less than 10km west of Woodcroft.
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