The mood in Adelaide is that the build up of pressure in its property market is set – sooner or later – to bring the city’s capital growth rates back into solid territory.
Adelaide Property Finders managing director Angelo Mena believes that there are scores of potential buyers out there who are just waiting for the right time to jump in. And when they do, the upswing in the city’s property market will be substantial.
“There’s a build up of pressure where people want to buy, and when things turn around we’re going to see things come good very fast – because of the way that the infrastructure’s unfolding, and because of the way that industry ’s starting to unfold with mining and defence,” he says.
South Australian lender HomeStart’s recently released Home Truths survey indicates that Mena may well have a point, finding that 77% of its SA respondents want to buy a property, but 55% believe that doing so is harder than it was 12 months ago.
“South Australians know owning a home is a way to invest in their future financial wellbeing, but they’re unsure if this is the time to make the move,” says HomeStart CEO John Oliver.
So, if you’re able to buy while the rest of the pack is fearful, Mena believes that now’s an excellent time to strike.
“Usually, whenever you see an upswing, the market’s probably moved 10% by the time people cotton on to it. And by the time they buy, it’s probably moved by 20%,” he says. “And on a median house price of $410,000 here in Adelaide, they’ve just lost $80,000.”
He suggests that the Le Fevre Peninsula offers up an excellent opportunity to buy into an area with all the fundamentals for strong capital growth in the future, as well as ticking the affordability box.
“If you look at the west and the east, the west is locked by sea and city; the east is locked by city and hills,” he says.
“They’re similar from that point of view, but the east is far more expensive than the west.”
Mena points to the Peninsula’s potent combination of beachside living, proximity to the city, planned future development and good prospects for employment growth.
One of the area’s key employers is Techport Australia, where the SA government has invested over $300m into state-owned infrastructure to develop a self-proclaimed world-class maritime industrial precinct.
The site will play a key role in delivering the navy’s next generation of $8bn Air Warfare Destroyers, and there are high hopes that it will continue to attract naval shipbuilding and repair opportunities to SA.
Mena strongly believes that the slow progress of the much-heralded Newport Quays development has deterred buyers from investing in the area, but that once the retail precinct stage of the plan comes to fruition, “the penny will start to drop”.
“Buyers are going to start to realise that they’re close to the beach, close to the city and that the whole place is feeling vibrant.”
He picks out Osborne (home of Techport Australia), as well as Ethelton, Glanville, Taperoo and Northaven as the ones to watch.
And, as a general rule, Mena suggests buying property to the west side of Victoria Road, which is closer to the beach and further away from the industrial zones.