Eastern Suburb Adelaide Review

Part five in our series of area reviews, David and I will cover off on some of the more active eastern suburb locations which investors may be looking to invest in.

Area Overview

The inner east, generally regarded as the most affluent ‘old money’ area of Adelaide, is a well-established group of micro suburbs stuck between the CBD to the west, and the Adelaide Hills to the east. The inner east was developed from the point of establishment of Adelaide, up until the 60’s/70’s on it’s outer fringe where it’s hit the geographic boundary of the Adelaide Hills, and the established North Eastern/Southern Eastern areas. The areas architecture reflects this, with the most CBD adjacent properties largely 1800’s/early 1900’s stone fronted villas, flowing into bungalows and art deco double brick residences in the middle suburbs, finally ending with austerity style and ex-housing trust stock.

With the continual gentrification of the East, especially the outer sections, there has been a progressive redevelopment of non-character stock into subdivisions, townhouses and apartments in arterial areas.

The Eastern suburbs development and commercial ring along the city has national presence from various corporates, particularly in Medical, Banking, Accounting etc (and also the office for Precision Funding :))

Median Prices

Demographics

As expected, median household incomes are above the mortgage belt outer suburbs in the Eastern suburbs. Median ages vary in a range of up to 20%, but no significant trends correlating between median house prices and age. I would suggest a part of this is that some sections of the East with higher medians also have significant old stock in apartments, which would be providing affordable rental stock for younger renters.

Why East?
A few of the reasons why an investor may consider the eastern suburbs:
Considered the most blue chip section of Adelaide, whilst representing significantly lower medians than Eastern state alternatives
Tree lined, character home filled streets with strong gentrification potential in the mid to outer sections of the East
Defined boundaries restricting the ability for urban expansion or new land supply coming onto the market, creating a steady limited supply of property, compared to increasing demand from property buyers

Corey’s Suburb Pick

Beulah Park

Renovated symmetrical cottage in Beulah Park

A micro suburb, Beulah Park is sandwiched between the highest median suburbs and the more affordable areas to the east. As a suburb you can secure a character home whilst at a discount to the inner most ring suburbs. This area provides an investment play which can attempt to ride off demand from those being priced out of the most expensive suburbs, providing an alternative which feeds off the same amenity and services of the shopping precincts, schools and public facilities.

Beulah Park is still considered as relatively ‘undiscovered’ for name recognition, as prices continue to rise this will assist in raising the profile of the area as an alternative for those looking for inner eastern style living.

Public transport is limited to buses on roads which gain heavy congestion, so good parking on the property is important to appealing to any renters. Yields still are well below the cost of ownership, so much like all of the suburbs noted you will be reliant on a growth strategy than cash flow.

Investment strategies which might suit the area: renovations, buy and hold gentrification play, development, long term growth strategy

Corey’s “what to avoid”

Apartments – particularly old stock.

Scattered through the suburbs are 60’s/70’s apartment blocks, with 1-2 bedroom small internal square meter apartments. Overall drivers for this type of low income housing doesn’t fit well with demographics of the area, detracting from the primary driver for the eastern suburbs: quality character living. Whilst there is not an active push by local council to release further apartment stock, this represents a future risk which can further temper prices compared to the deeply constrained supply of housing stock available in the eastern suburbs. Yields continue to remain low even for apartments, diluting the alternative of it being a potential yield strategy.