Whether you are an international or domestic property investor, chances are that Sydney and Melbourne may well be seen as the most obvious locations for your purchase. Unfortunately, property prices in these cities are relatively high, making it difficult to generate a healthy return on your investment. In addition, a number of analysts feel that prices are unlikely to rise further in those areas, making long-term asset appreciation uncertain. A closer look at the Australian map shows that there are a number of cities which are up-and-coming, with Adelaide at the top of the list!
Who is investing in Adelaide?
Adelaide offers an excellent opportunity for first home buyers or investors, due to a number of concurrent variables which make the city stand out for investment purposes. Interstate investors are looking to Adelaide as the city provides growth opportunities as the starting price is much lower than Sydney and Melbourne. First home buyers who rent to invest by purchasing an investment property in Adelaide, whilst continue to live and rent in Sydney or Melbourne, enables them to get on the property market sooner with a lower entry cost.
On the Market: Renovated 1913 cottage in Mile End SA 5031 for $750,000
What properties are ripe for investment in Adelaide?
One of the reasons why Adelaide is proving popular with investors, is that buyers can secure a free-standing house within 10km of the CBD, for the same price as a one bedroom apartment in Sydney.
A three bedroom home on 550sqm in Woodville Gardens (9km from the CBD) is currently under offer with a price guide of $340,000 to $360,000.
Emerging suburb Ferryden Park (8.5km from CBD) showcases a spacious three bedroom, two bath and two car garage home for $500,000.
Adelaide is perfect for buyers looking to purchase a house rather than an apartment. At the moment, Adelaide provides great bang for buck. But as with any location ripe for property growth, you need to move quickly before the prices go up.
Why invest in the Adelaide property market?
Burgeoning infrastructure in Adelaide
Things are happening in Adelaide! A considerable amount of public and private sector investment in the past few years hasn't just resulted in a welcome boost to employment, it has also kick-started a longer term program of growth and development. Now operating beyond Victoria Square, the revamped tram network provides fast, straight-forward access to different parts of the city, as well as connecting the various key projects which are underway.
The completion and opening of the new Royal Adelaide Hospital, a new entertainment complex, the South Australian Health and Medical Research Institute (SAHMRI), and the extension to the Adelaide convention centre have all significantly enhanced Adelaide's profile. The new infrastructure has also resulted in a large amount of additional office and residential construction, providing some great opportunities to snap up a property bargain.
Employment is growing in quantity and diversity
When it comes to employment, Adelaide has traditionally struggled. That gloomy picture has changed in the last few years, as a concerted effort by stakeholders has resulted in a number of fresh employment opportunities being generated. Many of the newer businesses that are locating in Adelaide require skilled workers, providing a great opportunity for migrants to enjoy a rewarding career at the same time as being able to acquire affordable property.
There has been substantial growth in new industries such as renewable energy, education and clean technology. There is also enormous potential for premium food and wine production to grow. The 30 Year Plan for Greater Adelaide is pretty impressive.
Adelaide Airport currently contributes $1.944b to the Gross State Product, supports 17,759 full time jobs and represents 2.1% of the State’s economic activity. Terminal 1 was built in 2005, but the Terminal Expansion Project, due to start this year, will add $167m to the Gross State Product following completion in 2021.
Adelaide property prices have the potential for growth
Unlike the more widely recognised growth hot spots, Adelaide property prices are still competitive. The expansion in properties recently means that it is still possible for investors to find a cheap option that is likely to appreciate in future years. As the regeneration of the city makes more of an impact, it is almost inevitable that the price of property will rise. The city has enormous potential, meaning any investment made now is highly likely to yield a good return.
Adelaide - a liveable and vibrant city
Adelaide has always had a reputation as a clean, pleasant city in which to live. It is still a relatively small city, with a welcoming "home town" feel. With excellent education opportunities, a thriving cultural calendar and some of the best restaurants you will find anywhere, it is a great place to live as well as to invest. If you want to explore fresh, exciting investment property opportunities, Adelaide is a great option!
Photo courtesy of Adelaide Convention Centre
Securing your investment property home loan
Working with an experienced mortgage broker like Mint Equity will give you access to up to 40 lenders to ensure you get the best investment property interest rate. Investment property interest rates are still a little higher than owner occupied rates, however some lenders are offering good deals on interest-only loan structures.
Contact the Mint Equity team to find out which lenders have the best appetite for investment home loans.