All Topics / General Property / Outer Southern Suburbs Adelaide Summary

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  • Profile photo of Corey BattCorey Batt
    Participant
    @cjaysa
    Join Date: 2012
    Post Count: 1,010

    Just as the Salisbury LGA Summary, D.T. and I have decided to round off the outer Southern Suburbs with our top 10 picks for most investor activity. There are a huge swath of other suburbs in the area not mentioned – which we will cover in a later review.

    Area Overview

    Currently a region with significant growing investor interest, the outer Southern suburbs offer below metro median prices, close access to beachside property and multiple infrastructure options for direct access to the CBD. The suburbs chosen are largely within the Onkapargina Council area – the largest council in South Australia by population size. The exception is Hallett Cove, which sits with the Marion Council which is directly north.

    Median Prices

    Christies Beach $349,000
    Christie Downs $263,000
    Hackham $257,000
    Hackham West $258,000
    Morphett Vale $293,500
    Huntfield Heights $261,000
    Seaford $339,500
    Seaford Meadows $371,000
    Noarlunga Downs $291,500
    Hallett Cove $422,000

    Development Potential

    The Onkaparinga and Marion councils both are embracing development to assist in their expanding population base. For the most post there is subdivision potential in the older 70’s areas with blocks >600sqm, however there is specific zoning allowing medium zoning – with block sizes averaging 150-250sqm and up to three storeys. You can read more about Onkaparinga’s medium density policy under review:

    http://onkaparingacity.com/onka/living_here/planning_development/medium_density_housing_project.jsp

    Demographics

    As a population area, Adelaide greater metropolitain area has an average age of 38.8 years, with the vast majority of the suburbs picked sticking to this figure – with exception to Seaford Meadows in which deviates from the median significantly. This can be attributed by the first home buyer and young renter preference for new builds, due to first home owner grant market distortions and a preference for lifestyle properties in the rental market.

    Median incomes in the areas described largely are below the metro average (~$1,150), with Hallett Cove outperforming – which follows trend with the area being at a significantly higher median.

    Corey’s Suburb Pick

    Christie Downs

    With close access to amenities such as Colonades shopping centre, TAFE SA, local hospital, express trains to the CBD and only a short drive to the beachfront – I see Christie Downs as a stand out considering the affordable median price for the area and Adelaide in general.

    It does current have a higher than average rental population in the area, however as the surrounding areas such as Christies Beach gentrify and costs increase, there’s a strong argument that this will cause an owner occupier flow on into the Christie Downs surrounding area.

    Yields are neutral for properties in the area, so Christie Downs makes for a balanced play in terms of rental return vs capital growth.

    Investment strategies which may suit the area: renovations, development, long term buy and hold for a balanced capital growth/yield focus

    Corey’s “what to avoid”

    Avoid buying into higher vacancy, cookie cutter subdivisions – particularly townhouses as you see in Seaford Meadows. There is a large supply component to any of these projects, so any demand is able to be met easily – keeping prices tempered indefinitely. Vacancy rates in these areas are significantly higher and the likelihood of a transition in area is hampered by any price increases causing a falloff in rental demand when the primary consideration is currently price.

    I’d make note however that it’s important to note that large greenfield development acts differently to infill development within established suburbs – as the latter does not have the same supply issues, and can be an actor in the change of demographics and desirability of an area.


    High density greenfield developments – Seaford Meadows

    Corey Batt | Precision Funding
    http://www.precisionfunding.com.au
    Email Me | Phone Me

    Investment Focused Finance Strategist - servicing Australia-wide

    Profile photo of D.T.D.T.
    Participant
    @dtraeger
    Join Date: 2014
    Post Count: 128

    Outer Southern Suburbs

    This has been quite a popular spot for investors, particularly interstate ones as the area allows for good value investing. The area has a low entry point, offers good yield as well as opportunities to renovate or develop.


    A typical house I did an interstate inspection on in Christies Beach which might become townhouses one day

    As explained last week in SA – Salisbury LGA Summary, vacancy rate of suburbs and the rental vs owner occupied ratios are important metrics to look at so I’ve sought out the statistics and provided graphs again.

    Aside from the obvious outlier above, the vacancy rates are quite healthy in this region are quite healthy and we’ve typically been able to rent houses quite quickly.

    The rental population in this area is quite high in this area upon first glance – some might even say to alarming levels. However you have to learn how the numbers interrelate – if it were an issue, it would push vacancy rates up but they have maintained steady despite this.

    The infrastructure in the area supports this. There is a satellite CBD at Noarlunga with one of the state’s biggest shopping centres, cinemas, tafe, hospital, and everything you’d need. There’s an express train (45 mins) to Adelaide CBD or a short drive to Lonsdale for the blue collar working folk.

    Typical rents in the area

    I’ve graphed the typical rents for houses in the area, separating out new from old as there is quite a bit of redevelopment in the area. Note that there’s going to be some variance on rents, depending on the style and condition of the house and what features it has. Like anywhere: allowing pets, having a secure spot for the car, providing heating and cooling and you’re golden.

    Dave’s Suburb Pick:

    Christies Beach

    The gentrification going on in this area is visible on both a residential and commercial level. Old houses are being torn down and replaced with newer ones, or in some cases new multiples. This is increasing the quality of demographic in the area.

    At the same time, the number of tattoo parlours and op shops that used to line the Beach Rd precinct are now dwindling and we’re seeing in a rise in wine bars, yoga studios and cafes.

    Dave’s “what to avoid”

    Small blocks like those under 500 sqm as this is a young family area.

    The biggest inquiry source I get when leasing properties in the area is from families with pets and children and so your best bet is to cater for them by having usable, fully fenced backyards.

    Families with pets or chidren can potentially provide you with a higher rent return or more stable tenants

    • This reply was modified 3 years, 10 months ago by Profile photo of D.T. D.T..

    D.T. | DT Property Management
    http://www.dtproperty.com.au
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    Adelaide Property Management - whole Adelaide metro

    Profile photo of Duane RekDuane Rek
    Participant
    @duanerek
    Join Date: 2016
    Post Count: 7

    DT
    Thanks for the info on those outer suburbs
    I’m thinking of investing in the Christie Beach/Downs area
    Are there any streets I should be looking at?
    Are townhouses in Christies Beach worth a look at?
    Which of the 2 would be better for Growth?

    Cheers

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