Forums / Property Investing / General Property / Eastern Suburb Adelaide Review

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

    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.

    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

    Adelaide Eastern Suburbs

    The prestigious eastern suburbs of Adelaide provide plenty of capital growth opportunities for investors, both in the short and long terms. It is quite a desirable place to live for both owner occupiers and tenants alike.
    Well established, character-filled, tree lined streets dominate the region as well as highly sought after schools. In such a blue chip region, don’t expect to get much rental yield.
    One of the disadvantages of the region is the lack of public transport services present. Given the wealth in the area, I doubt this is a concern. It does make some of the main roads busy for commuters though. There has been plans of extending the city tram to the eastern suburbs but these have received no funding yet.
    As discussed in previous area reviews, vacancy rate and owner occupier ratios combine to tell a story of how over or under supplied an area is and thus whether worth investing in. The eastern suburbs of Adelaide are predominantly owner occupied and low vacancy, allowing investor activity if you can afford the price tags. The exception being units in Norwood which are very over supplied – unfortunately the figures available online doesn’t separate dwelling types.

    View post on imgur.com

    View post on imgur.com

    Median rents in the area
    I’ve graphed the median rents in the area, separating houses and units which as you can see are quite disparate.

    View post on imgur.com

    School zones
    Driving families to the area is the strong desire to be in one of the top schools in Adelaide. There are 3 main ones in this area – Glenunga International High School, Marryatville High School and Norwood Morialta High school. There are several well performing private schools in the area as well.

    Glenunga International High School zone map – https://www.decd.sa.gov.au/sites/g/files/net691/f/glenunga_international_high_school_zone_map.pdf
    Marryatville High School zone map – https://www.decd.sa.gov.au/sites/g/files/net691/f/marryatville_high_school_zone_map.pdf
    Norwood Morialta High School zone map – https://www.decd.sa.gov.au/sites/g/files/net691/f/norwood_morialta_high_school_zone_map.pdf

    A little about each of the suburbs:
    Norwood – Closest to the CBD of all suburbs in this review, its home of the trendiest café strip in all of Adelaide “The Parade”. It has many trendy cafes, restaurants and local businesses.
    Magill – Has a University campus and the aforementioned Norwood Morialta High School
    Tranmere –Has an interesting demographic – the old houses here are predominantly Italian who have been there for decades and the newly built townhouses rapidly popping up to replace them are mostly Asian families.
    Rostrevor – At the foothills (part of the suburb even comes under Adelaide Hills Council). Grand 2 storey homes are quite common.
    Burnside – Also foothills, some properties get exquisite views of Adelaide from here. Has the Burnside Village, which is a prestigious shopping centre home of many high end fashion labels.
    Glenunga – Known mostly for its school, which is one of the most sought after in South Australia.
    Kensington Park – Along with Kensington Gardens is very well regarded, famous cricketer Sir Donald Bradman lived here.
    Firle – Has the only Kmart of the eastern suburbs. Not as well regarded as the other suburbs in this list as reflected by the lower rental figures and higher rental population.
    Beulah Park – Avoid the main roads that border this area! Within has nice character homes at affordable prices to get you close to the action without being on top of it.
    Maylands – Well established area with nice homes. Has good potential being as its next to Adelaide’s highest price suburb at St Peters.

    Dave’s Suburb Pick:
    Tranmere –
    The well-priced old homes are providing plenty of opportunity for both renovation and development.
    Local vernacular refers to the better part of the suburb as Poets Corner, where a few streets have famous poet names and are generally better regarded and appearing do streets. Refer to the Campbelltown City Council website as to what is possible here. The Poets Corner section has slightly stricter zoning than the rest of the suburb.

    Dave’s “what to avoid”
    Units in Norwood.
    There’s far too many of them and are quite over supplied and difficult to let. Additionally, majority of them were built in the 60’s prior to planning laws and as a result are now seeing the maintenance issues pile up.

    • This reply was modified 2 years, 10 months ago by Profile photo of D.T. D.T..

    D.T. | DT Property Management
    http://www.dtproperty.com.au
    Email Me | Phone Me

    Adelaide Property Management - whole Adelaide metro

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

    For those interested in property investment in Adelaide – there’s also a facebook group which a number of users from this forum and others are using: https://www.facebook.com/groups/adelaidepropertyinvestors/

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

    Investment Focused Finance Strategist - servicing Australia-wide

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