The affordable Adelaide hotspot with all the investor credentials

Isolating that needle in a haystack that will deliver capital growth and strong rental returns is the ambition of every real estate investor, and API columnist Anna Porter believes she's pinpointed just such a gem in Adelaide.

Port Adelaide docks, with homes and ships in Port River at sunset
Units near the Port Adelaide foreshore can still be picked up for relatively affordable prices. (Image source:

Many interstate property investors are flocking to Adelaide for the affordability, while home buyers are relocating from expensive capitals like Sydney and Melbourne for the lifestyle the area offers.

The Adelaide market has plenty to offer investors, with rising rental returns, properties in the $400,000-$500,000s range for strata and $600,000s for a house, a growing economy and long-term job creation, all underpinning the stability and growth of the housing market.

For some investors, knowing where to buy is the challenge.

With so many options available, the choices can feel overwhelming. Some like to build their strategy around smaller units in the CBD with good yields but these can have less growth.

Other real estate investors focus on larger land content in the gentrifying suburbs on the fringe of the metro areas such as Hackham and Woodcroft.

Many look to the popular entertainment districts like Glenelg, which are tried and tested to perform, but the price point takes a big jump up.

All of these options can deliver an investor a great result, but many investors overlook one of the up-and-coming suburbs that only locals tend to know about.

Port Adelaide on real estate radar

Port Adelaide is just half hour from the Adelaide CBD and has a rich industrial history.

The area is now becoming a vibrant residential waterway suburb that offers lifestyle, amenity and great views over the ports and canals at many properties.

The area has a lot of new development along the foreshore, including new residential units around Fletchers Slip and land releases on the coastal strip further north to Fort Largs, along the peninsula.

Fort Largs having once been an active military site as far back as the 1800s is now a beachside destination for retirees and young families.

Investors should not be overlooking these areas if they want to get the most out of Adelaide.

Property investors can pick up a one-bedroom, brand new unit in the mid $400,000s and two-bedders in the high $500,000s around the foreshore precincts.

The performance of the area though is a two-speed market. The housing sector has seen 16.3 per cent growth the past 12 months, whereas the unit sector has only managed 0.1 per cent growth for the same period. 

Will unit market bounce back?

Some may find these results concerning, but to others it can represent an opportunity. Rarely are there many markets where this much of a divide in annual growth is seen, let alone sustained.

It is reasonable to assume that the unit market is simply lagging.

With many new developments still coming out of the ground and data still being captured for the sector, this creates an anomaly where the housing sector can soar ahead with buyer demand driving sentiment, while the units sector waits to play catch up.

An astute investor, with an appetite for moderate risk and a little speculation can take advantage of these conditions and get ahead of the curve by investing in quality units or strata products.

But as always in real estate, too much supply of a product, or the wrong product, will result in underperformance.

Buyers and investors alike need to do their homework. This is especially true if buying off-the-plan, as there are a range of additional risk factors that need to be managed.

Article Q&A

Where should property investors buy in Adelaide?

Port Adelaide, a half hour from the Adelaide CBD, is an investor hotspot, with a lot of new development along the foreshore and a strong economy, where property investors can pick up a one-bedroom, brand new unit in the mid $400,000s and two-bedders in the high $500,000s.

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