Adelaide has unfairly earnt itself a reputation across many decades for being a bit of a sleepy country town, with not much to offer. However, the winds of change have finally blown its way and the city has experienced a renaissance as one of Australia’s best destinations for food, wine and culture – and excellent property investment opportunities. Unlike other Australian cities, Adelaide was designed with free settlers in mind, so more care and elegance was put into the design. The central urban grid, surrounded by parklands was innovative for its time; today the city that has grown around it, is testament to the careful planning of its designer, Colonel William Light.
Because of its relative size – Adelaide’s population of roughly 1.7 million people is just over a third of Sydney and Melbourne’s at over 5 million people each – the city maintains a country town kind of atmosphere. The main thoroughfares that neatly guide drivers from north to south and east to west, and the ideal positioning of the CBD between the Adelaide hills and the southern beaches has organically created a highly accessible and spacious city with just 20 kilometres distance from Adelaide’s north to its south. This means that wherever buyers choose to invest in property, they are almost guaranteed to be within easy reach of a day at the beach, a leisurely lunch at an Adelaide Hills winery, or of course – work in the city centre.
The type of properties available to Adelaide buyers are also unique, thanks to the overall aesthetic of the city. Suburbs are spacious and leafy, with wide residential streets, an abundance of native trees and birds and an eclectic blend of more than 2,000 heritage listed buildings, plus historic sandstone properties and stone bungalows. Contemporary properties are sympathetically integrated to be streamlined with existing streetscapes and outdoor spaces, including front AND backyards, in many cases are the norm rather than the exception.
The collective outcome of all of these idyllic components means investors will actually get much more value for their money in an Adelaide property than almost anywhere else in the country. Over the last year or so, median house prices have been around $615,500 for houses and around $425,000 for units (as of 28th March 2019 realestate.com.au) – a rise of 1.5% for the period (Dec 2017 – Dec 2018 ABS).
So, what does that look like on the ground? Well 10 to 12 kilometres from Adelaide’s CBD lands you at Henley Beach, West Beach, Glenelg Beach or Brighton Beach for example. Median house prices at these waterside suburbs range from over $820,000 at West Beach to $920,000 at Glenelg. When compared to Sydney, that distance offers Clovelly, South Coogee and Maroubra as counterparts with a median house price range between $1.8 million at Maroubra and over $3 million at Clovelly. Similarly, 10 to 12 kilometres from Melbourne CBD offers you Elwood and Brighton with median house prices of over $2 million in Elwood and $2.46 million in Brighton. Suddenly Adelaide is looking irresistible right?
Not all of us are looking for coastal properties of course, but beachside suburbs are certainly on the wish lists of many Australian investors, and the accessibility and price ranges of properties in that category, certainly offer some insight into the cities as a whole. If harbour views or beachside living are a priority, a move to Adelaide can be the difference between being a have or a have not, given the dramatic differences in prices. Moving more broadly across the city though, suburban Adelaide offers properties that are well beyond the expectations of buyers who are sadly accustomed to Sydney and Melbourne prices. Not only is there a greater offering of larger properties available, within the scope of a reasonable budget, investment in suburban Adelaide presents some of the nation’s strongest growth opportunities.
Although Adelaide offers wide ranging affordability, there are specific areas that offer great deals, ensuring you get more bang for your buck. Because Adelaide started out with such great urban design, many of its inner urban suburbs are 1 to 3 kilometres from the CBD – that’s walking distance to work for some people! Many inner urban areas are currently undergoing somewhat of a transformation as industry is relocated further out of residential zones and the ‘cool cred’ of former warehouse and factory precincts attracts younger buyers.
Thebarton is a great example of this – just 1 kilometre from the city centre and in the early stages of becoming gentrified – it offers a diverse range of character properties all offering great entry level opportunities for young buyers. Median house price is currently $612,000 (28th March 2019) and properties include double fronted stone homes, or single fronted cottages, as well as contemporary apartments, catering to its emerging primary demographic which is young independent professionals. Nearby Hindmarsh - previously popular for its proximity to a coveted North Adelaide address – is also offering inspiration for those keen to boost their investment through renovating older character homes. There are also a number of contemporary apartment and unit complexes in the area and residents have the city just 2 kilometres away by free tram.
Similarly, Torrensville is just 3 kilometres from the city and also benefiting from a younger, more independent population. Current price data puts the median price for a 3-bedroom house in Torrensville at $550,000. Houses are predominantly stone or brick and residents are young couples, families and independent young people. Neighbouring suburbs such as Underdale, West Hindmarsh, Cowandilla and Richmond are all joining forces it seems to rebrand Adelaide’s west, capitalising on their great positioning between the city and Henley and West Beaches, as well as an easy run to the nearby airport. Their proximity to Adelaide University makes them a hot spot for local and foreign students, looking for an easy commute to class and affordable rent. Commonly, properties are stone fronted cottages on large blocks (so great subdivision options), with established gardens and are either ready to rent, or need a little maintenance to maximise their investment potential. Properties in Richmond for example are a little newer (post war) than in Thebarton and Torrensville for example however still great opportunities for capital growth. Median house prices across these suburbs range from $515,000 in Cowandilla, $533,000 in West Hindmarsh and $543,000 in Richmond, to $645,000 in Underdale.
North of the city, suburbs such as Kilkenny, Welland and Bowden are also hot tips for investors. Kilkenny is around 7 kilometres from the city centre but has started to generate buzz as the one to watch due to its pleasing street scapes and generous selection of 3-bedroom period homes, on the market at under $600,000. Smaller pocket suburbs such as Welland are also worth keeping an eye on, but those looking now should seriously consider Bowden. Though it is known for its abundance of apartments, the character homes in the area are priced as competitively as the apartments so a house will be a much better investment in the long run. Bowden has developed considerably in recent years and buyers are attracted not only to the large blocks of land and city’s edge location, but also to the burgeoning community in the area, fostered in part by the offerings in the Bowden urban village such as the Plant 4 market, eatery and function spaces and various cafes, bars and restaurants.
As always, the best approach is to speak to the agent local to the area and get some up to date advice about the market. If picking a specific suburb, ask about which are the best streets within those suburbs. Streets with a high concentration of character homes and established neighbourhoods with local pubs, cafes, restaurants bars and High Street style shopping precincts offer some stability as there is an engaged supporting population and incentives for other investors to buy locally.
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The following advice is of a general nature only and intended as a broad guide. The advice should not be regarded as legal, financial or real estate advice. You should make your own inquiries and obtain independent professional advice tailored to your specific circumstances before making any legal, financial or real estate decisions.