The plethora of property metrics being published lately is showing some stark differences between locations around the nation.
Now, this is not unusual at all, because historically our nation has always been made up of a number of different markets doing different things at the same time because of a variety of diverse economic factors.
That was why the boom market conditions around almost the whole nation during 2021 was so unusual because generally that doesn’t happen.
Now, though, we are definitely starting to see market cycle differences with some select suburbs in Sydney and Melbourne apparently posting double-digit median home value falls over the past year, according to CoreLogic.
However, at the other end of the spectrum, we have cities like Adelaide, which is the leader of the capital city pack when it comes to median home value performance over the same period. That’s because its median home value has actually increased 7.1 per cent over the year to the end of January!
Perth comes in second with growth of 2.6 per cent, while the other three capital cities recorded median home value falls.
But remember of course that you can’t even generalise across one city. There are suburbs that fall and suburbs that rise even within the same city. So take all those generalised figures with a large pinch of salt.
So, why is Adelaide outperforming other bigger cities? Well, it has a lot of do with what is happening in the city’s northern reaches.
There’s something about Salisbury
If you drive about 30 minutes north, or jump on the train, from Adelaide’s CBD you will find yourself in the City of Salisbury, which has been through a construction boom courtesy of medium-scale projects generating thousands of jobs. Unsurprisingly, property prices have responded with double digit growth.
For example, the $1.9 billion Edinburgh Parks Precinct is under development and dedicating space to multiple industries.
The Edinburgh Parks industrial estate is South Australia’s largest master-planned industrial estate with the Northern Adelaide Food Park also home to food and beverage processing manufacturers, food packaging specialists, cold chain supplies and logistics firms.
Proximity to major employment precincts is also a key part of Salisbury’s appeal as well as defence projects with investment totalling more than $4 billion.
Also, in Salisbury, there is the $250 million Gawler train line electrification project, the $240 million redevelopment of the former Holden plant site, as well as the $28 million Salisbury Aquatic and Recreation Precinct. All of this activity has buoyed the property market in a big way. Rents are rising, yields are just awesome, and vacancy rates are extremely low. These market metrics provide opportunities for entry-level investors who are attracted to the Northern Adelaide region by affordable house prices as well as high rental returns.
Also in Northern Adelaide we have the City of Playford, which has strong transport and military hubs as well as future developments focused on health and sports precincts.
That said, manufacturing remains important with 2,800 people working in the industry in the region. Playford is also the logistical and advanced distribution centre of South Australia, plus, Playford Council and the University of Adelaide jointly developed the $16 million dollar Stretton Centre in Munno Para that opened in 2015.
The Playford CBD is being rejuvenated to the tune of $293 million, courtesy of a plethora of small projects, either recently completed or under construction, that have created 3,300 jobs.
Playford also has a variety of housing throughout and ongoing urban development continues to spread with new housing estates offering affordable housing. The local council also says that many longer established areas of Playford are earmarked for revitalization.
Agriculture remains relevant in the LGA with an annual output worth around $94 million and vegetables accounting for 82 per cent of this figure.
In terms of some of the other highlights that interest property investors, it is the fastest growing LGA in South Australia, has multiple major jobs precincts, affordable housing and extraordinary yields.
The $250 million Playford Alive Town Centre Redevelopment is being jointly managed by the council and state government and is a project that involves regeneration as well as development of new housing areas to support the construction of 4,000 homes that will eventually house a population of some 40,000 people.
The new town centre with also feature new shops, cafes and restaurants with the precinct also hosting commercial spaces, improved community infrastructure, three new schools, and health facilities.
More market positivity ahead
Adelaide’s northern suburbs have a combined population of about 350,000 people, which is forecast to increase by four per cent per year until 2036 – a figure that is well above the national average.
Historically, Adelaide has been one of the most consistent and stable capital city property markets in Australia but also very underrated from an investment perspective in my opinion.
South Australia’s handling of the COVID19 pandemic also really helped to generate fresh interest from investors who became attracted to Adelaide’s lower cost of living when compared to some of the other capital cities on the eastern seaboard.
Sales activity and prices remained solid in 2020, rose to boom status in 2021 and 2022, and hasn’t really stopped in some areas. Most suburbs in the Playford and Salisbury areas have recorded double-digit price growth and very strong rental yields in the past year, off the back of strongly rising sales volumes and ultra-low vacancy rates, but they still remain affordable and are very attractive to investors.
Playford is one of the steadiest housing markets in the metropolitan area and has
many suburbs which deliver very steady sales levels. The Salisbury city centre has always been a hive of activity for business and retail and is also fast becoming a prime aspirational residential address.
New housing is planned for a number of locations within the city centre with sites identified for a range of housing including detached small-lots, medium density, town homes, apartments and mixed-use development sites.
Without question, I believe that both cities of Salisbury and Playford are poised for major upticks in the wake of considerable government investment in infrastructure as well as major employment growth.
If you want to download my free area report for Northern Adelaide showcasing all these statistics, then click on this link and remember different areas are going to do different things at different times for different reasons because not all property markets perform the same.
Likewise, not all of them are suitable for every investor so give us a call to talk about your next investment property!