Adelaide - Recently Crowned Australia's Most Liveable City, But Does It Stack Up For Property Investors?

With a burgeoning foodie scene, an art, music, and festival calendar and premium wineries on your doorstep to rival any other Australian city, plus some spectacular coastline and outdoor adventures to be explored, it’s hardly surprising Adelaide has been crowned Australia’s most liveable city. In fact, Adelaide came in third in The Economist Intelligence Unit’s Global Liveability Index for 2021, positioning it as a hot spot both globally and domestically. But how does it stack up from an investment point of view?

Investment appeal

Bordered by parklands and natural beauty, Adelaide’s known as a city where you can simultaneously do business and breathe. It’s this lifestyle balance that many are seeking, which is contributing to Adelaide’s reputation as a fantastic place to live. Work-life balance aside, here’s what’s positioning Adelaide as a hot investment spot:

• Poised for long-term economic growth

With $3.8 billion BioMed City – one of the largest health and life sciences precincts in the Southern Hemisphere – setting up camp right in the heart of Adelaide and some of the world’s largest businesses like Google, Amazon, Deloitte, MIT, PwC, Accenture and The Australian Space Agency all opening the doors to new offices in Adelaide, the economic future for Adelaide is looking very bright.

• With economic growth comes employment

Due to the sheer volume of large-scale businesses calling Adelaide home, employment opportunities are substantial. Add to this the fact that South Australia has become the country’s ‘Defence State’, which has created thousands of jobs (it currently accounts for around 1.5% of all jobs in South Australia). This number is pegged for further growth, with French shipbuilding company Naval Group predicted to create another 4,000 jobs in the next seven years.

• Local government infrastructure investment

Adelaide is a globally connected city, and the revolutionary Ten Gigabit Adelaide landmark project positions the city as the first in Australia with a city-wide 10Gbps fibre optic network. In addition, there is over $3.6 billion of existing and planned CBD infrastructure developments, including the renewed Riverbank precinct, which attracts millions of visitors annually.

• The education draw-card

With world-class education institutions (the city’s universities are ranked within the top 2% of institutions in the world), over 140 public and private schools, 25 English Language Intensive Courses for Overseas Students (ELICOS) institutions and 13 private higher education institutions, students head to Adelaide in droves, making rental accommodation in continually high demand.

Where you’ll find Adelaide’s investment sweet spots

Not surprisingly, the CBD’s inner-ring suburbs remain the most attractive from a growth and rental perspective; however, outer-north, and southern suburbs are seeing similar levels of growth. And with Adelaide’s median house price sitting just over $570,000, it presents significant value as the third most affordable capital city behind only Darwin and Perth. From a rental perspective, Adelaide has the least available rental space of any Australian capital city, with vacancy rates of just 0.6%. According to Canstar’s Rising Stars Australian Property Market Report, here’s where you’ll find Adelaide’s 5 best suburbs to invest in:

1.  Belair – with a 7% rise in median house prices in the last quarter of 2021 alone, this suburb on the south-eastern foothills of Adelaide has easy transport options to the CBD, great schooling options and Belair National Park on its doorstep. All this results in strong rental demand and opportunities for long-term capital gains.

2.  Broadview – currently undergoing a period of transformation as older houses get replaced with new, Broadview in the City of Port Adelaide Enfield is a family-friendly suburb with affordable housing. Rental demand is strong, with near-zero vacancies and a median price on the rise (up 10% to $600,000 in the last quarter of 2021).

3.  Eden Hills – close to the city but with a country feel, Eden Hills has seen a climb in house prices in the last 12 months, with a current median house price of $660,000. Just 20 minutes to the CBD and 15 minutes to the beach, rental properties are in high demand, and the current vacancy rate sits at 4%.

4.  Elizabeth Vale – the northern suburbs of Adelaide include some of the most affordable (some with median house prices below $200,000); however, with Adelaide in growth mode, these suburbs present great future value for investors. Elizabeth Vale in the Playford Region has a large rental population (with over 42% of residents living in rental properties) and near-zero vacancy rates.

5.  Golden Grove – also in the northern precinct, Golden Grove is a leafy suburb within the City of Tea Tree Gully. It features excellent infrastructure, easy access to the CBD, fantastic schooling, and plenty of amenities, making it a desirable suburb for renters and homeowners. The median house price jumped almost 10% in the last quarter of 2021 (to $565,000).

Ready to invest?

Before you hit the open home trail, it’s essential to get your ducks in a row. This includes getting your finances in order, understanding your budget, and learning the intricacies of the local market. Here’s what you need to consider:

• Explore equity in your existing home – in short, equity is the difference between the market value of your current home and the balance of your mortgage. If you’re in the fortunate position to have built up equity (by paying down your mortgage, through capital gains, or a bit of both), your lender can advise you how much usable equity you have available to invest. While you’ll need to speak to your lender to get a bank valuation on your property, your local First National Real Estate office can provide an indicative market valuation to get the ball rolling.

• Identify your goals and stick with them – while it can be easy to get swept up in the appeal of a potentially lucrative do-up or a home you might like to live in for retirement, keep your end goal in mind. With investment properties, ongoing maintenance, tenant demand, and potential for capital gains should be at the forefront of decision making.

• Understand the local legal intricacies of sale and purchase – if you’ve purchased a property before, you might think you’re familiar with the process from a legal perspective. However, different states have different intricacies that you need to be aware of. Things like due diligence, vendor statements, and the type of sale (i.e., private treaty versus auction) can all differ, so it pays to get a property professional involved and make sure you’re well versed.

• Understand your obligations as a landlord – if you’re looking to rent your investment property out, you’ll need to be across your rights and responsibilities. Legal Services Commission South Australia provides plenty of detail around residential tenancies.

If it’s your first time investing, this Guide for First Time Investors is packed with plenty of practical tips, and First National Real Estate is always on hand to share our local knowledge and expertise. And if you’re considering a rental investment, our property managers are a wealth of information regarding potential rental returns.

DISCLAIMER

Please note the information provided here is general in nature and should not constitute legal, financial, or professional real estate advice. You should make your own inquiries and obtain independent professional advice tailored to your specific circumstances before making legal, financial, or real estate decisions. Click here for full Terms of Use.

• Residential property is affordable

While median house prices are experiencing growth, Adelaide has one of the lowest residential property prices of all Australian mainland capital cities.