Nearby wine regions, gothic cathedrals, a thriving food and bar scene and international cultural events are just some of the drawcards for tourists heading to Adelaide.
But the ‘city of churches’ is also home to picturesque properties with affordable price tags, attractive for shrewd property investors looking to buy into a market before values head north.
While values in some of the eastern capital cities are going down, Adelaide is on the way up.
Peter Koulizos, an author and property lecturer at the University of Adelaide, told Auction Day there are some great buys in Adelaide.
“We’ve got some great opportunities to get onto that upward swing of the property cycle,” Koulizos said.
“Adelaide being one of the most affordable capital cities in Australia, your money in Sydney and Melbourne can buy a lot more in Adelaide than it can in your own capital city.”
Koulizos said it’s finally “Adelaide’s time to shine” but despite positive signs in the Adelaide property market, it can’t escape certain challenges.
“There’s a federal election coming along and we are not sure who is going to be voted in. Depending on who is going to be voted in will affect investors.
Possible changes to negative gearing and capital gains tax plus tight credit are all factors on which the Adelaide market is contingent.
“It’s very hard for people in Adelaide to borrow money just like it is very hard for people anywhere else in Australia to borrow money.”
Investors often compare Adelaide to Perth when it comes to property markets around Australia. But Koulizos says Adelaide is the “safer bet” for investors because the market is already on the uptick.
Perth housing, on the other hand, has underlying complications.
“Perth is now the cheapest capital city in Australia.
“Even cheaper than Hobart which is a huge difference from 2006 where it was the most expensive in Australia and even more expensive than Sydney, so that’s a big fall from grace over 13 years.”
“Perth is a long term play, I know Perth will come good,” Koulizos said.
Tips for investors buying in Adelaide
Koulizos’ top tip for investors looking to buy in Adelaide is to find good local agents and a buyer’s agent.
When looking at Adelaide properties, there are some factors that don’t necessarily need to be taken into account as compared to buying property in the eastern states.
“I know in Sydney everybody wants to be close to a train station.
“But in Adelaide, nobody really cares about public transport. Most of us drive our cars, parking is pretty easy and cheap.
Koulizos also says being under the flight path or near the airport is not a huge negative as the airport is only 4km away from the city and the beach, plus Adelaide does not have as many or as big aircraft as Sydney or Melbourne.
Where to buy in Adelaide
Koulizos revealed his top ten suburbs in Adelaide for investors to keep on their radar.
The common factor with all these hotspots is they are undervalued suburbs close to the city that are undergoing gentrification.
Koulizos says the suburbs are characterised by a high concentration of character and period style homes that are being renovated by young people on relatively high incomes who are moving into these suburbs.
Top 10 suburbs and streets in Adelaide
Kintore St, Dew St, Dove St, James St
A sandstone house at 22 James St recently sold for $665,000, a remarkably affordable price considering it’s a character house only 1km from the CBD.
“It needs some work but you can change that. The one thing you can’t change is its location,” Koulizos said.
Thebarton is in the early stages of gentrification and Koulizos compares the area to Footscray in Melbourne or the West End in Brisbane.
“There used to be lots of industrial but now that’s moving out and young people with money are moving in.”
Danby St, Northcote St, Carlton Pde, Wainhouse St, Huntriss St, Stephen St
A house at 19 Stephens Ave is a good example of more bang for your buck in Adelaide as compared to capitals in the eastern states.
The Tudor-style character home is only 3km to the city and sits on 1000sq m of land.
“$750,000 is a lot of money for Adelaide but you are getting a lot of land and a lot of house really close to the city,” Koulizos said.
“The other benefit for our western suburbs in adelaide is they are between the city and the beach.”
Torrensville compares to Yarraville in Melbourne or Erskenville in Sydney.
Parts of West St, Holden St, George St, Susan St
Hindmarsh is 2km from the city and accessible via a free tram to the city.
Koulizos says good coffee and food has attracted a young population to the area who are renovating the character homes, which in turn has increased house values.
Arnold St, Howard St, Hinton St, Norman St, Pearse St
The location of the suburb 4km from the city makes it easy to find tenants.
“A lot of international students love this area and neighbouring Torrensville and Thebarton because it is so close to the university.”
Large blocks of land in the area make renovation an attractive prospect.
“Not only is it easy to renovate it, but the block is so big, you can subdivide it into three.”
Yallum Tce, Tarcowie St, Kupman St, Copley St
Torrens Ave, McDonnell Ave, Young Ave, Albemarle St
Hounslow Ave, Neil Rd
Craig St, Shierlaw St, Lane St, Bickford St
Northern end of Welland Ave, Frederick St, Fischer St, Bond St
Gibson St, Ninth St, Tenth St, Eleventh St