Part four in our series of area reviews, David and I will cover off on some of the more active inner north/north eastern suburbs which investors may be looking to invest in.
Area overview
The inner Northern/North Eastern hub is under three main councils – the Adelaide City Council, Prospect Council and Walkerville Council. With most of these properties being old suburbs of Adelaide, the streets are largely filled with quality character homes on large allotments. Even though they are generally on blocks which are upwards of two times the median block size of Adelaide, the micro councils of inner Adelaide restrict development – so they can maintain the heritage of the area. Concessions have been made along transport corridors such as Prospect Rd and Churchill Rd, where there is a surge in apartment construction.
These areas fit the middle to upper demographic of Northern Adelaide suburbs, with significant gentrification occurring across many of the main shopping and retail strips.
Median Prices
Medindie tops the list considering – unsurprising for an locals as this area has some of Adelaide’s largest turn of the century mansions, some sitting on excess of 4000sqm. You’re unlikely to buy a property to rent in this area, but it is important to understand the flow on popularity that these suburbs can have on adjacent areas.
Devon Park represents the lowest median – a relatively unknown area, it is a small suburb which has old industrial sites which are being decommissioned and townhouses built in the area. Directly adjacent to Prospect, it may well see a rise in popularity as affordability pushes people into the area and the suburb street scape improves.
Demographics
All areas within this review except Devon Park have incomes significantly above the metropolitan median, this is expected with all suburbs being above the metro median house price. Medindie and Walkerville standout with the highest age and household incomes, which also matches with the highest medians in the areas – a clear correlation.
Why Inner North/North East?
*One of the most desirable areas of Adelaide
*Large property sizes above the metro norm as small micro councils refuse development on the character filled streets – fuelling growth through a lack of supply for an increasing buyer pool
*Large gentrification in progress – with cafes, restaurants, dessert bars, independent fashion retailers
*Ease of access to both CBD and middle ring North/West/East employment hubs, including substantial public transport infrastructureCorey’s Suburb Pick
Prospect
An average Prospect Bungalow, a common construction style for the areaAdjacent the CBD and North Adelaide, Prospect represents an established character suburb going through significant uplift as being a ‘trendy’ suburb of the inner North. Prospect Rd is filled with cafes, restaurants and retail – being supported by the Prospect Council to make this a vibrant hub.
Whilst prices have already risen strongly over the recent years, the comparative value in terms of property size and quality is still lower than its Southern and Easter counterparts. I believe over the long term Prospect will continue its strong growth trend as desirability and lack of supply keeps upwards pressure on prices.
Corey’s “what do avoid”
Apartments
Apartments being built in Prospect Council utilising the relaxed development plan for high density construction on main transport corridors
With the rezoning along the transport corridors in the Prospect Council, there has been an exponential surge in apartment development in the area. This ongoing supply will have difficulty in selling in an area where there isn’t strong demand. CBRE has noted in a recent Adelaide property summary that developments along these corridors have as much as 25% of stock failing to sell in the last year alone, with this year’s stock levels to exacerbate the issue.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Adelaide Inner North
While the inner north suburbs of Adelaide are not quite as prestigious as the inner east or inner south, over the past 5-10 years it has become a very desirable place to live for both owner occupiers and tenants alike.
The vacancy rates match the national averages in this area with good results coming from the more traditional owner occupier filled areas. The main exception being North Adelaide which (combined with its Rent : OO ratio you’ll see shortly) has reached over supplied status.
As you can see this region has a very health owner occupied housing pool. This is great for the demographics and stability of the area, hence the capital growth prospects. This does mean poor yields though. Devon Park’s is outside of the acceptable norm, yet still has low vacancy rate so could be sustainable.
Typical rents in the area
I’ve graphed the typical rents in the area, but unlike previous write ups have separated houses and units but you’ll notice that there are no statistics available for units in a couple of the suburbs as these areas are made up of predominantly houses.
What are each of these suburbs like?
North Adelaide – One of Adelaide’s favourite spots for vibrant pubs, restaurants, cafes and shopping. Lots of gorgeous character period homes.
Medindie – Primo owner occupier residential area with an executive demographic. Very few tenants.
Prospect – Blue chip suburb that everyone seems to want to live in. Has turn of the century homes with leafy tree lined streets. Prospect Rd which runs up the middle is the main café strip of the region.
Nailsworth – Flew under the radar in Prospect’s shadow until recent times when its price tag caught up to that of Prospect.
Broadview – Previously a state housing area, but due to its proximity to the city and the removal of state housing, is now starting to lift as an area.
Sefton Park – Dotted with bungalow type properties, whose values haven’t caught up to neighbouring Prospect and Nailsworth yet.
Devon Park – Less desirable due to being adjacent the train line and light industrial area, but its proximity to the city will help hold its value.
Collinswood – A level down from neighbouring Medindie and Walkerville
Vale Park – A small, affordable suburb (relative to its neighbours), as mostly comprises houses from the 1950’s.
Walkerville – Large estate style homes with tennis courts out the back.
Dave’s Suburb Pick:
Sefton Park
Sefton Park is a bit of a sleeper suburb. It’s quite affordable and adjacent to suburbs that are much more expensive. Capital growth could be expected here.
It is next to 2 major shopping precincts and well known private schools.
As seen in the graphs above, its vacancy rate and owner occupied ratio are well within acceptable bounds for investing in. At time of writing, there are only 3 properties available for rent in the area which is a good demand signal.
A property in Prospect that we manage
Dave’s “what to avoid”
Apartments. As seen with the statistical numbers presented in North Adelaide, they create a supply problem for tenants in the area. Even more are being built in the region but I’d advise staying clear of them if you want to be able to lease them in a timely fashion.D.T. | DT Property Management
http://www.dtproperty.com.au
Email Me | Phone MeAdelaide Property Management - whole Adelaide metro
Wanting to find out about investing in Adelaides Eastern suburbs? Part 5 here: https://www.propertyinvesting.com/topic/5030468-eastern-suburb-adelaide-review/
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
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