Unlocking the secrets to investing in Adelaide's booming market

Katherine Skinner, Director, National Property Buyers, highlights that Adelaide is an investors' hotspot right now but there are some local nuances buyers should be aware of if they are to capitalise on their property investment.

Aerial view of Adelaide's eastern suburbs
Adelaide's eastern suburbs typify the lifestyle advantages Adelaide presents for property investors looking for quality real estate. (Image source: Shutterstock.com)

Adelaide has become one of the most attractive capital cities in which to invest.  

The latest quarterly results out from CoreLogic show Adelaide outperformed every capital city and achieved the highest growth for the quarter. 

So, it is no surprise local and interstate buyers are attracted to the investment opportunities the Adelaide market presents with its capital growth opportunities, tight rental markets, high rental yields, and more affordable buy-in price.  

For those considering investing in Adelaide, it is essential to be aware of critical factors affecting the local real estate landscape.

Adelaide is a diverse city with different neighbourhoods and property types, each offers unique advantages and challenges. 

How to act in a low supply market 

Adelaide's property market shows no signs of slowing down, with a growing population and increased interest from interstate and international migrants, demand for housing has remained phenomenally high.

Supply, however, supply has been very constrained.

While we have witnessed an uptick in new listings, it has not been enough to significantly increase the supply pool.

Adelaide is currently 38.9 per cent below the previous five-year average and buyers have a limited pool of property to inspect and buy.

With investors locally and interstate being drawn to the city's relative affordability, as well as interstate migration and population growth, that overstretched supply is only going to be tested further.

What does low supply mean for buyers?  

Low supply means the market for in-demand properties such as family homes and A-grade investment properties is highly competitive.

Buyers need to be ready to act in this market and assertive with selling agents when interested.

Don’t hold your cards so close to your chest that it risks the property being sold before you have even had a chance to place an offer.

Let agents know you are interested and think about whether you can submit an early offer to catch other interested buyers off-guard. 

Should you buy a house or an apartment? 

There are many different property types in Adelaide, from character homes on large parcels of land to modern townhouses on compact blocks, and apartments in multi-unit buildings.  

What property suits you depends on financial goals and the time and energy you want to put into maintaining or improving the investment. 

One of the most frequent questions asked is, “should I buy a house or an apartment’ and for our clients, we almost always stare them towards houses, townhouses, or villa units.  

We can identify incredibly attractive 12-month growth rates for apartments but believe properties on land will see more growth over the longer term and provide opportunities to add value through updates, renovations, or redevelopment.

The old saying that land appreciates and buildings depreciate is as true in Adelaide as anywhere else.

And when you can buy a house on 700sqm of land within 20 kilometres of the CBD for $600,000 why wouldn’t you?

Where are Adelaide’s growth corridors? 

There are around 300 suburbs in the Greater Adelaide region encompassing a huge variety of neighbourhoods and lifestyle options.

Due to the size and the layout of the region it’s relatively easy to get to the city, beach or hills easily within a day. 

There are well-established wealthier suburbs dotted around the city fringe of North Adelaide and the CBD and a number of these suburbs have median house price points of $1.5 million and $2 million dollars, which is substantially higher than our current median for houses of $691,591. 

While these wealthier suburbs will most likely continue to enjoy growth, to get real bang for your buck with a lower budget there are some growth corridors and areas that are worth focusing on.

Among them are the northern and southern suburb pockets with easy accessibility via the Southern Expressway or North-South Motorway. 

Suburb Distance to CBD Median House Price 12month Growth Average Annual Growth
Prospect 5.5kms North $1,050,000 +9.23%  +8.52%
Unley Park 3.8kms South $2,175,000 +8.75% +5.20%
Parafield Gardens 16.95kms $538,000 +14.83% +9.77%
Salisbury North 21.5kms $400,000 +13.84% +9.86%
Woodcroft 19.55km $654,500 +13.83% +10.35
Happy Valley 16.87kms $640,750 +13.21% +10.44%

Understand South Australia’s regulations

It may not be the most compelling way to spend some down time but taking the effort to learn about the key differences in how the real estate market operates in South Australia compared to other states is essential for successful investing.  

Adelaide’s market is dominated by private sales as opposed to auctions, with roughly three private sales for every auction.

Purchases at auction, just like other states, are by default unconditional, however, if you purchase through a private sale, you get a two-day cooling-off period.

Unlike other states, there is no penalty for pulling out during the two-day cooling-off period. In fact, if you can coordinate it, we often do our building and pest inspection during this time for our clients to remove the need to add it as a condition to our offer. 

In South Australia no money changes hands in a private sale scenario until after the cooling off period has expired. 

Pre-settlement inspections are also not done simply as a matter of course, which is common in some states.

If you want to do a pre-settlement inspection, you need to submit the request as an inclusion to your contract. That, however, may make your offer less appealing if you are up against other interested parties.

And of course, stamp duty rates and available concessions differ in every state. The differences between states can make the process confusing for people looking to buy in other states for the first time. 

Research can help pay dividends in Adelaide’s hot market 

When investing in any market, you need to research the local economic conditions, find areas that are likely to experience significant growth in the medium to long term and understand neighbourhoods and their proximity to work hubs, public transport, schools, shops and the potential for future development or gentrification.  

The wonderful thing about Adelaide is you are spoiled for choice, and can buy an investment property near the coast, the city or even in the hills.

There are A-grade investment opportunities in all these locations, starting with budgets as low as $350,000 for an Adelaide investment property. 

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