Adelaide delivering investment value around $500,000 mark

Positioned as one of Australia’s most affordable cities, Adelaide punches well above its weight for dwelling value growth, while promising solid windows of investment opportunity in the $500,000 market, especially to the city’s north.

Unlike the wider national market, Adelaide’s July monthly property price growth accelerated (up 1.4 per cent) and set a new record high for median dwelling values (at $671,755). Home values nationally have remained 5.3 per cent below the April 2022 peak, according to CoreLogic’s Hedonic Home Value Index released Tuesday (1 August), and while prices are rising the pace of growth has eased.

Emma Slape, Chief Executive Officer, Turner Real Estate

Well below the median, however, sits a sweet spot for real estate investors and owner occupier first home buyers who, local experts say, are well catered for in the $500,000 market while retaining reasonable proximity to Adelaide’s CBD and famous beachfront coastline.

Emma Slape, CEO, Turner Real Estate in Wayville, and a director of the Real Estate Institute of South Australia (REISA), highlighted the quality of properties available in that price range.

“The State Government has invested in incentives for first home buyers wanting to build and that has opened up a lot of opportunity in this price bracket, particularly for land located within 15 to 20 kilometres of the city.”

Ms Slape said a 456sqm lot in Seacombe Gardens is selling for $420,000 to $435,000 and is located a 25 minutes drive from the Adelaide CBD, and seven minutes to Brighton Beach, six to Glenthorne National Park and 20 to the airport.

“Family homes too, located in that distance from the city, are still accessible for around $500,000 and they attract very strong tenant demand and a solid weekly rent, which offers a solid rental yield and still has excellent potential for capital growth in the longer term,” Ms Slape said.

Top 10 Adelaide suburbs for growth

PropTrack’s Home Price Index released Tuesday found Adelaide leads other capital cities for capital growth at the moment and has delivered strong annual growth of 5.3 per cent.

The report singled out Adelaide’s north, where the median dwelling value of $573,000 has emerged from 8.66 per cent growth over 12 months.

The top 10 Adelaide suburbs or areas with the highest 12-month value growth listed in CoreLogic’s HVI include four in the $500,000 bracket, being to the north, Playford ($432,957, 10.8 per cent growth), Gawler-Two Wells ($519,198, 9.2 per cent), Salisbury ($537,226, 7.7 per cent), and in Adelaide City ($532,889, 3.6 per cent growth).

Adelaide’s 10 fastest growing suburban property markets

Source: CoreLogic.

Ms Slape said a northern suburban family home in Valley View, was currently under contract, for just over $500,000 as a two bedroom, one-bath, six-car, 785sqm block, 28 minutes from the CBD and 30 minutes to Semaphore Beach.

This price is below Valley View’s median house value of $622,509, where house values overall have risen 1 per cent in the three months prior, though a 0.2 per cent drop in the last 12 months is evident. Median weekly rent of houses in Valley View are at $555, which is a 10.1 per cent rise in yield over the year to date.

“Adelaide suburbs to watch with a median price of $450,000 to $600,000 in the north are Ingle Farm, Paralowie, and Para Hills, in the south, Happy Valley, Reynella and Morphett Vale and to the west, Taperoo and Osborne,” Ms Slape said.

Will Clark, Data Analyst, Ray White Group told API Magazine there are about 23 suburbs with houses that slot into the $500,000 market.

“For houses, you can get as close as 11 kilometres from the city centre in Rosewater, and beyond that Para Hills, Eagle Farm and Woodville North.”

Apartments delivering capital growth

For units, Mr Clark said the closest to the CBD in this median price zone would be in Wayville, just two kilometres from the CBD.

“You could get some two-bedders and three-bedroom units, but there was a lot of range, especially in terms of quality.

“You could get some really big units starting to cost a lot more, but you could get a two-bedder and all that you could expect of it, at this price.”

Will Clark, Data Analyst, Ray White Group

Ms Slape agreed a small bedroom apartment is still accessible in the $500,000 price range close to the city, while moving to the outer suburbs allows for securing a three- or four-bedroom home with a small backyard ideal for a family.

“A unit in north-west Adelaide suburb Findon can be bought for $345,000-$375,000, which is the type of opportunity that would suit an investor or owner-occupier first home buyer.

“The median price for an apartment in Adelaide is $445,000, which also opens great opportunities for investors who want a low maintenance unit in a prime location and because Adelaide apartments generally always attract a strong tenant pool.”

“It’s just important to research the building and understand the strata costs in these complexes to ensure a stable long-term investment strategy.”

Nerida Conisbee, Chief Economist, Ray White Group released new data showing Adelaide had some of the strongest apartment price increases, up more than 0.3 per cent in July.

“There was no capital city that recorded a decline in apartment prices over the month and all cities are now recording significant increases over the past 12 months.

“Brisbane and Adelaide are recording the largest increases, while rental growth is also starting to slow for houses across Australia but remains strong for apartments, and one positive about the growth, particularly in apartments, is that it is likely making more new projects viable and this will ensure greater housing supply over the next two years.”