With property prices skyrocketing in Sydney and Melbourne, homeowners and property investors are looking at Adelaide to invest in. But that’s not the only reason why investing in Adelaide is ideal.
Adelaide has been named one of the most liveable cities in the world– with its beautiful beaches, wine regions and excellent weather. It offers everything a modern city offers with the added benefits of a laidback lifestyle, spacious residential living in suburbs within 5 to 6 km of the CBD at affordable prices and plenty of space to grow.
But is investing in Adelaide a viable option?
When it comes to investments, finances matter – how much it will cost you and what your returns are – important aspects to consider.
Affordability is the most important factor. According to realestate.com.au, the median house price in Adelaide is $590,000. The median house sales price has shown a 25.7 per cent growth in the last five years. This amounts to a compound annual growth rate of 4.7 per cent annually.
Compared to that in Sydney, it’s almost impossible to find a house priced below $ 1 million with a 5 km radius of the CBD.
According to Domain Group, Melbourne median house price has risen to $880K, which is $100,000 more than last year.
This affordability in Adelaide coupled with a steady growth rate offers a solid return on investment. In fact, right on trend, people are selling their properties in Sydney and Melbourne and using their equity to invest in Adelaide – perhaps because the steady Adelaide market offers relief from the ups and downs found in the property market elsewhere.
Another important factor to take into consideration is the vacancy rate when you are investing in property as this determines the rental demand for your property. Adelaide has a vacancy rate of 1.8% according to July 2017 SQM Research, making it a very appealing city to invest in at the moment.
Adelaide also offers good rental returns with median weekly rent for houses at $360 and $295 for units according to a report by Domain in September 2017.
The SA government also offers some pretty good incentives for investment such as the off the plan stamp duty concession to encourage investment in off the plan apartments along with a pre-construction grant of $10,000 and other tax incentives.
So what are the best suburbs to invest in?
Coastal and inner suburbs have been seeing a good boost in growth but this ripple effect has moved on to the outer northern and southern suburbs with suburbs like Redwood Park in the north being most in-demand, according to REA Group’s Property Demand Index report.
The best-performing markets in a decade are Prospect, Campbelltown, Unley and Norwood according to Core Logic.
Adelaide’s northern suburbs are very popular with investors offering a rental return of about 4.6% with a lower median house price compared to other popular suburbs.
Other popular suburbs in the east besides Norwood and Campbelltown are Mitcham, Burnside and areas with school zones such as Glenunga and Marryatville.
There is also significant interest and growth in the Adelaide Hills in suburbs like Blackwood and Stirling.
In the south, the Onkaparinga council and Marion are great places to invest with interest growing in areas like Seaford, Christies Beach and Morphett vale.
The west is probably Adelaide’s most diverse region in terms of price and housing but rental yields for Holdfast Bay, West Torrens and Port Adelaide are high.
In fact, areas like Charles Sturt and West Torrens Councils are among the top ten in Adelaide for a five-year median house rate growth.
With major regeneration projects in the pipeline in and around the CBD, Adelaide is set to offer the perfect combination of world-class infrastructure, property affordability and a great lifestyle – making Adelaide the perfect city to invest in property.
