Adelaide Western Suburbs – City to Sea

Clearly property opportunities exist everywhere in Adelaide. However over years in the real estate industry, we have been able to gain some insights into the broader Adelaide market which I will share here.

The metropolitan Adelaide can be generally be broken up into 5 broad sectors, these being North, East, South, West and City Central.

City Central is an excellent location however this is predominately made up of apartments. A lot of examples exist of apartment being sold off the plan only to have their value eroded after only a few short years. One of the issues with city apartments is that a couple of development decisions to build high rise apartments could very quickly flood the city central area and lead to an oversupply and the accompanying stagnation of growth. This being said, property in prime city location and immediate surrounds – North Adelaide, Unley, St Peters, Mile End will always hold its value.

A Comparison of Northern and Southern areas in Adelaide

Both the Northern and Southern areas and the Eastern and Western areas tend to have some commonality between them.

To start with let’s look at the Northern and Southern Areas. Up until recently the Northern and Southern areas had more in common than they do now and this is due to a number of factors.

Because of the geographical nature of the Southern area, this area eventually finds itself land locked between the hills and the ocean. Although there are still large parcels of land that development can take place on, the volume of this land pales into insignificance relative to what is now available in the Northern Suburbs due to the “Adelaide 30 year plan”. In this plan, hundreds upon hundreds of hectares have been made available in areas such as Angle Vale, Munno Para, Bucklands Park, Virginia and others.

This release was possible because unlike the southern sector which is geographically confined, the Northern area, due to its flat open expanse of available land has no such restrictions other than planning policy restrictions – which are subject to change at any time.

Putting it into perspective howerver, it took the new suburb of Mawson Lakes around 20 years to fill in with housing. The amount of land being made available in the Northern areas is now many times greater than the size of Mawson lakes.

Pricing is directly affected by supply and demand. When considering differences between long term performance between the Northern and Southern sectors this must be considered as an over supply will generally tend to hold price down.

The Southern sector now has a duplicated southern express way while the Northern areas have the Northern express way and now increased capacity of South road. The Northern sector also has the exiting of the Holdens factory and the accompanying reduction of employment in the area which will also affect pricing.

When comparing areas or sectors there is often a dynamic interrelationship between a number of factors, however weighing everything up and taking many of these factors into consideration it appears that the Southern Sector, whose median is currently similar to the Northern sector may begin to outperform its Northern counterpart in the years to come.

Comparison of the Western and Eastern Adelaide Suburbs

As mentioned previously, there is an relationship to be considered between the Eastern and Western suburbs of Adelaide. Both East and West are separated by the city and geographically land locked by some geographical feature. The Western suburbs are geographically land locked by the sea and the Eastern suburbs are geographically land locked by the Adelaide hills.

The general proximity to the city for both sectors is similar. In both sectors you are no further than 10km to the city. But interestingly they are priced differently and this is where opportunities in the Western Suburbs can be found.

Here are the differences:
The median home price is significantly higher in the East compared to the West ($100,000 to $150,000 higher in the East for a property of equivalent building area and character). This is largely due to local government policies which encourage the maintaining of character homes on large allotments in the east.

The West however is not only more accessible from a pricing point for the general population, but can also be quite favourable towards development due to local government authorities being more open towards development and land division.There are better zoning policies in the Western Suburbs.

These factors of geographical similar natures of east and west together with an easier pricing entry point in the west as well as favourable development areas makes the western sector an area of opportunity. It is also seen in areas such as the West Torrens City Council area that a nice blend of planning has been put in place where medium to high density can coexist with character areas that are being maintained for future generations.

The area along Anzac highway – Ashford to Plympton is falls under policy area 34 – medium to high density development. New policies coming in place to do more with the land available due to the geographical land locking

Most of development potential however is restricted as the boundary touches the zoning just behind it – area 24 (which only allows building to 3 stories) so unique opportunities can be found within that policy. There are a few houses which have features allowing policy 34 development.

This house: http://www.realestate.com.au/property-house-sa-glandore-121…

This is unique because there is a lane behind it making it fall under the zoning that allows high density development – it cannot be cancelled out by the restricted zoning behind it due to the lane way and therefore high density applies to this property.

Opportunities exist throughout the whole real estate market and in all sectors, and it is true that people who specialise within any sector of the market will more readily identify opportunities far easier than people who watch from a distance on the side lines. This being said though, the fundamental nature of various areas within the Western sector as well as large blocks commonly found in the area lends itself very nicely to investor opportunities that are very well worth taking a closer look at.