Thursday, April 19, 2018

Opportunities for landlords in 2018

With the current market as it stands right now, we believe there is great opportunity for investors to buy their first property or grow their portfolio. 

As we head into the second quarter of the year, we think units are certainly the ones to watch. Whilst house prices recorded a slight decline (0.4%), the average price of units across Adelaide rose. 

We believe the popularity is due to their affordability. Units open up locations that may not have been previously available to purchase in, giving investors more choice. Tenants also certainly enjoy the low maintenance that these properties offer. The lower price point for units, particularly in the eastern suburbs and off the back of an incredible year of growth for houses in 2017, is the key driver here. 

You can pick up a unit in sought-after suburbs such as Norwood, Kensington and Toorak Gardens for around $350,000, whereas houses in these areas can have a median house price as high as $1.4 million. This vast difference in pricing is creating huge opportunities for landlords looking for increased cash flow and higher yields (as opposed to high capital growth). Tenants love being so close to the action, and those units that have a fresh feel with modern amenities aren't staying on the market for long. Tenants will pay a premium for location, convenience to the CBD, and if local shops, schools and cafs are close by. 

Unlike other capital cities, units in Adelaide have not kept up with the same pace as housing growth in the past 12 months. This is where we see the opportunity lies.

Whilst the first quarter of property results show that the 9% growth predicted for houses may not be on the cards, units are a different ball game. Tim Lawless, Head of Research at CoreLogic RP Data, describes Adelaide as a steady and resilient marketplace despite a national slowdown over the first quarter of the year. 

We see the opportunity for landlords to make the most of the current market, with units as a potential front runner. If you want to find out where we are seeing the best investment opportunities in the state or what property types are providing the greatest returns, please give our team a call today. We'd love to chat with you and share what we are finding out in the field!

No comments: