Outer Southern Suburbs Adelaide Summary

Just as the Salisbury LGA Summary, D.T. and I have decided to round off the outer Southern Suburbs with our top 10 picks for most investor activity. There are a huge swath of other suburbs in the area not mentioned – which we will cover in a later review.

Area Overview

Currently a region with significant growing investor interest, the outer Southern suburbs offer below metro median prices, close access to beachside property and multiple infrastructure options for direct access to the CBD. The suburbs chosen are largely within the Onkapargina Council area – the largest council in South Australia by population size. The exception is Hallett Cove, which sits with the Marion Council which is directly north.

Median Prices

Christies Beach $349,000
Christie Downs $263,000
Hackham $257,000
Hackham West $258,000
Morphett Vale $293,500
Huntfield Heights $261,000
Seaford $339,500
Seaford Meadows $371,000
Noarlunga Downs $291,500
Hallett Cove $422,000

Development Potential

The Onkaparinga and Marion councils both are embracing development to assist in their expanding population base. For the most post there is subdivision potential in the older 70’s areas with blocks >600sqm, however there is specific zoning allowing medium zoning – with block sizes averaging 150-250sqm and up to three storeys. You can read more about Onkaparinga’s medium density policy under review:

http://onkaparingacity.com/onka/living_here/planning_development/medium_density_housing_project.jsp

Demographics

As a population area, Adelaide greater metropolitain area has an average age of 38.8 years, with the vast majority of the suburbs picked sticking to this figure – with exception to Seaford Meadows in which deviates from the median significantly. This can be attributed by the first home buyer and young renter preference for new builds, due to first home owner grant market distortions and a preference for lifestyle properties in the rental market.

Median incomes in the areas described largely are below the metro average (~$1,150), with Hallett Cove outperforming – which follows trend with the area being at a significantly higher median.

Corey’s Suburb Pick

Christie Downs

With close access to amenities such as Colonades shopping centre, TAFE SA, local hospital, express trains to the CBD and only a short drive to the beachfront – I see Christie Downs as a stand out considering the affordable median price for the area and Adelaide in general.

It does current have a higher than average rental population in the area, however as the surrounding areas such as Christies Beach gentrify and costs increase, there’s a strong argument that this will cause an owner occupier flow on into the Christie Downs surrounding area.

Yields are neutral for properties in the area, so Christie Downs makes for a balanced play in terms of rental return vs capital growth.

Investment strategies which may suit the area: renovations, development, long term buy and hold for a balanced capital growth/yield focus

Corey’s “what to avoid”

Avoid buying into higher vacancy, cookie cutter subdivisions – particularly townhouses as you see in Seaford Meadows. There is a large supply component to any of these projects, so any demand is able to be met easily – keeping prices tempered indefinitely. Vacancy rates in these areas are significantly higher and the likelihood of a transition in area is hampered by any price increases causing a falloff in rental demand when the primary consideration is currently price.

I’d make note however that it’s important to note that large greenfield development acts differently to infill development within established suburbs – as the latter does not have the same supply issues, and can be an actor in the change of demographics and desirability of an area.

High density greenfield developments – Seaford Meadows