Thursday, June 09, 2016

We call Adelaide home… but why are we not investing in our own backyard?

Leading economists are confused about why local Adelaide investors are not taking advantage of the current property investment market.

Earlier this week I had the opportunity to talk with Senior Economist, Dr Andrew Wilson, on the Australian property market where he shared his knowledgeable (and quite profound) insights.

At the moment Adelaide is a robust market and Dr Wilson explained the reasoning behind this. He highlighted that right now you can still purchase property at very affordable levels compared to interstate markets, yields up to six to seven per cent are being achieved and we have very tight vacancy rates. Additionally last year was Adelaide's best year of performance 
in eight years.

Dr Wilson's comments support exactly what we have been seeing within the investment space since late last year. Adelaide has fantastic investment opportunities, literally on our doorstep... yet it appears to be the interstate investors that are making the most of this - not us.

With strong signs coming through from property analysts, where are they seeing the greatest activity?

The east and western suburbs of Adelaide are continuing to be the strongest markets at the moment. Houses for rent (compared to units or apartments) are performing very well as there is a fixed amount of supply, particularly within the ring of suburbs around the Adelaide CBD. This is in contrast to the northern suburbs of Adelaide, where the market is currently quite flat as a result of the changes in the manufacturing industry.

So where are the up and coming locations?

The southern suburbs are starting to experience growth, driven by increased accessibility of public transport and the affordability and lifestyle that these suburbs offer. As demand develops for this area, we also expect to see this flow through to an increase in investment activity.

Looking at the next few years, Dr Wilson expects that across Australia investors will be chasing yields, not capital growth. He foresees that investors will rely less on general upswings or broad market trends, and activity will be based more on individual circumstances and opportunities that present themselves at a 
local level.

Personally I found it very interesting being able to pick Dr Wilson's brain on all things investment. Adelaide is very much on the property analysts' radar across the country 
and we can see why!

If you want to get involved in the Adelaide investment market, we'd love to chat with 
you. Feel free to give me a call personally on 
0413 594 285 and we can help you with your next investment purchase or management.

Suzannah Toop

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