Adelaide is the standout market and opportunity for investors
The standout market for me at the moment is Adelaide.
The South Australian capital has more forward momentum than most of the capital cities. Given that this has not yet translated into major price growth, it represents an opportunity for investors.
Adelaide is the only capital city which ended 2013 with sales volumes rising significantly and carried that into the early part of 2014. Some of our cities peaked, in terms of sales activity, in early or mid 2013. Some ended 2013 strongly but made a lukewarm start to 2014.
But SA is really just beginning its run.
Sales volumes are now 25% higher than they were at the start of 2013. Figures from the Australian Bureau of Statistics and Australian Property Monitor for the March quarter showed some movement in prices, but nothing substantial – around 1% for the quarter, with annual median price growth hovering around 4%.
The numbers will be larger by the end of the year. Throughout Adelaide there are suburbs with strongly rising sales activity.
What makes Adelaide so attractive for property buyers is that it’s by far the cheapest mainland capital city. You can buy two Adelaide houses for the price of one Sydney house.
The standout area of Adelaide, the one with the most forward momentum and the most compelling growth drivers, is down in the far south of the metropolitan area.
The municipality of Onkaparinga has an array of growth markets and is boosted by significant new transport infrastructure.
The new rail links to Seaford are now operating, with plans to further extend the line south to service areas like Aldinga Beach and Port Willunga.
At the same time, the $500 million upgrade of the Southern Expressway is under way. The two infrastructure projects together are revolutionizing transport links from the south to central Adelaide, a factor that usually supercharges property markets.
This is showing up in the sales figures. Several Onkaparinga suburbs are moving forward strongly, including Aldinga Beach, Flagstaff Hill, Happy Valley, Huntfield Heights, Woodcroft, Aberfoyle Park, Christies Beach, Christie Downs, Port Noarlunga South, Seaford and Seaford Rise.
Other areas of Adelaide with plenty of forward-moving markets include the municipalities of Campbelltown (a cluster of inner north-east suburbs, mostly with median house prices in the $400,000s), Holdfast Bay (bayside area including Glenelg) and Salisbury (lower end northern suburbs, with median prices mostly in the $200,000s).
There’s also steadily rising activity in the inner-city apartment market.
The hard part is convincing anyone that Adelaide and South Australia are worthy of investment. The state and its capital city lack the growth reputation that draws investors to Queensland and Western Australia.
Even South Australians are reluctant to invest in Adelaide. Now would be a good time for an attitude adjustment.
You can contact Terry via email or on Twitter.
Photo courtesy of Doug Barber/ Creative Commons.