Hiya,
How many of you saw Elizabeth profiled in this months API magazine?
The TL;DR version:
Quoted from the magazine article (bracketed comments are my own)
1.0% vacancy rate vs 1.9% for Adelaide metro
3.8% year on year rental growth (this combined with the above means rental demand is great)
44% of the area as renters vs owner occupiers & mortgage holders
Median house price increased 15% in the 12 months to May this year
Last boom was in 2010 at $228k median (it’s just now reached this again, so presumably this is the break out signal you’d use on sharemarket charts?)
Elizabeth itself has just 1,000 residents (Elizabeth itself is mostly the commercial hub, where one of the states largest shopping centres is) but the greater area has 60,000
Median rent is Elizabeth is $258pw at about 6.9% yield.
Nearby Elizabeth Vale has one of Adelaide’s largest hospitals and average rent nearby at $265pw for houses or $201pw for units at about 7.3% yield.Treasurer Tom Koutsantonis delivered the Northern Economic Plan ($93 million in 15-16 FY state budget) for a range of initiatives aimed at boosting economy in northern Adelaide and Elizabeth. Upon Holden closure in 2017, he promises to use all the levers at their disposal to support new and growth industries and stimulate the construction sector. A new Manufacturing Technology Centre will be established to provide a physical location for manufacturing and services businesses. Budget also signals the development of nearby Northern Adelaide Industrial Food Park to create more job opportunities.
Margaret Lomas contributed with (snipped down in length by me) “… worried about economic matters, including Holden closure. News like that often creates often creates a sentiment that doesn’t necessarily ring true but it has a short term negative impact. … In fact many of the residents of Elizabeth work in the city and other suburbs and will continue to do so even after Holden’s closed”. She also went on to say she owns 5 properties in the area and is about to bulldoze 2 of those to build 4 units on each.
Who else has invested or will invest in Elizabeth area? Any thoughts in general?
D.T. | DT Property Management
http://www.dtproperty.com.au
Email Me | Phone MeAdelaide Property Management - whole Adelaide metro
Reasonably balanced article which has touched on what I have experienced with my portfolio, and likewise what I’ve seen a lot of client’s portfolio’s go through.
Fundamentals stack up well if you understand the local tenant requirements – @dtraeger can touch on this no doubt. No point having a deluxe semi in Davoren Park..
Running on quick numbers, the last 10 valuations I’ve put through in the Playford area have had a range of 10-35% increase since last valuation OR purchase, note the upper end is usually from short term purchase with renovations so a bit of a distortion. Generally with the purchase/reno properties I buy have a post reno increase of 24-29% increase after purchase price + costs.
A couple weeks ago I ended up at over at the commercial precinct at Playford Alive – quite impressive in size and quality. Gone are the days of cheap construction – real money is being invested in the projects:
Would I invest directly in the Playford Alive (Munno Para) section specifically? Not really. Supply will keep the prices tempered, so I will continue to focus on the medium density zoned old trust areas with 8%+ yields and development potential.
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This reply was modified 9 years, 1 month ago by Corey Batt.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Also – a few Adelaide investors have started a Facebook group to post about Adelaide – anyone interested feel free to join:
https://www.facebook.com/groups/593978310741768/Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Also – a few Adelaide investors have started a Facebook group to post about Adelaide – anyone interested feel free to join:https://www.facebook.com/groups/593978310741768/
Great idea for Adelaide investors (not just Eliz!) to connect with each other! In for this for sure.
D.T. | DT Property Management
http://www.dtproperty.com.au
Email Me | Phone MeAdelaide Property Management - whole Adelaide metro
Just a bunch of mugs in that group. :-)
Great idea! Count me in.
Corey highlights some good points in his response.
I suppose the key issue is what is your plan and strategy, for me , manly due to time, I am a buy and hold investor. My views of the area are a little bias as I grew up in Elizabeth West (now re branded to Daveron Park due to the very poor reputation, crime and social houseing levels in the suburb) and my mum still lives in the Elizabeth area.
Having said that, I have tended not to invest there as due to my buy and hold strategy med to long term growth has not been good, average family income is only around $700 to $750 per week, high levels of social housing or assisted housing, additionally some talk of reducing the Army footprint at the local RAAF base will have a direct affect on demand and the ongoing economic/job issues in the area.
Yes yields are good, but for me, Im after a health yield to hold and potential for growth in my equity on the property over time, especially the 2 to 4 yr period.
With a med house price properly closer to about $190K noting the good growth in the last 12 months prices are today about on par with what they were in 2008 before the 2010 boom as indicated by Corey in his response. So about even after great growth in the last 12 months its still 9.5% lower then it was 5 yrs ago.
So it really is dependent on your strategy, for me doing buy and hold, its a no. But for reno, dev I can not comment because that’s not what I personally do.
Cheers
SteveSteve
Email MeThe devil is in the detail, always ask why?
Yes, I have been lookin beore the magazine, but as teve posted out, there has been no growth forlast 5-7 yrs when i comapred the purchased price the owner paid and what they ask for, may be 10k above and some even went backward.
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This reply was modified 9 years, 1 month ago by
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