Buying for under $300,000 in Adelaide will require a compromise on space or locality: HTW

If investors want to buy a home in Adelaide for under $300,000 they have two main options, according to Herron Todd White.

They can buy a three-bedroom house 25 kilometres from the city or a two-bedroom unit five kilometres from the city, according to the September month in review report.

“For $300,000 you could purchase an older three-bedroom dwelling of around 100 square metres on around 700 square metres of land or a newer three-bedroom dwelling that is possibly a little larger on a smaller lot of around 300 square metres located within the outer northern or southern suburbs,” the report says.

“These suburbs would include Morphett Vale, AldingaBeach, and Seaford Rise in the south and in the north the suburbs of Elizabeth and Salisbury and surrounding areas.”

The report highlights a three-bedroom home in Salisbury Heights (pictured below), which recently sold for $299,000.

The sale is very close to entry-level price into the Adelaide market, according to the report, with detached dwellings at between $250,000 to $300,000.

The report does warn that buying in the outer suburbs of Adelaide means a possible risk of compromising capital growth as well as a potential for rising vacancy rates.

“Often built from the 1960s to 1980s many of these homes are now dated and would respond well to upgrading allowing for the potential of value-add in the future.”

For units, $300,000 will buy a two-bedroom unit within five kilometres of the CBD or in beachside suburbs including Glenelg and Henley Beach, with a significant proportion of these being older-style units built in the 1970s and 1980s.

The report highlights a two-bedroom Marleston unit (pictured below) that recently traded for $292,000.

The entry price for units in the Adelaide market is around $200,000 or even slightly less, according to the report.

“It is worth noting that at this very low end of the market the price of the dwelling is directly reflective of its quality and location. This price point (and slightly higher) in the Adelaide property market is the realm of first home buyer and investor.”

The report is upbeat about the Adelaide housing market, although it is somewhat flat.

“The Adelaide property market in the short term continues to be flat and limited growth is expected in the next 24 months.”

“Both of these property types are currently yielding around 4% to 5% gross.

“Relative to other investment prospects such as shares or long term saving accounts we think that property still remains a viable long-term investment.”