IF you’re looking to buy your first home, upgrade, or purchase an investment in the new year, CoreLogic’s annual Best of the Best report is a crucial roadmap on the journey to property ownership.
The report, released today, reveals the state’s top-performing suburbs across a range of categories, based on data up to November 2018.
Toorak Gardens had the highest median value over the past 12 months at more than $1.43 million. The most expensive units are found in Norwood, Kent Town and Brompton, each with median values above $430,000.
Elizabeth North’s houses, which were the cheapest in the state at $165,296, were more affordable than the state’s lowest valued units – found in Salisbury for a $189,016 median.
Real Estate Institute of South Australia president Brett Roenfeldt said it had been a good year for SA property. “Adelaide’s market is typically very steady, so the average median house price has increased steadily over the past 12 months,” he said.
“On the back of cooling markets in Sydney and Melbourne, we’re very attractive buying. Our stock levels have been very tight this year … and I don’t see that changing as we go into 2019 – it might get a little tighter, I think.
“In the metro area there’s not a huge amount for buyers to pick and choose from, so there’s still good competition for quality stock and good prices being achieved.
Brooklyn Park has the state’s most affordable housing within 10km of the city – with the median unit price at $263,737, while the cheapest houses within the same distance are found at Mansfield Park for just under $403,000.
The city recorded the state’s highest value of sales at more than $188 million worth of units and apartments, while Mawson Lakes had the highest value of house sales at almost $126 million. When it comes to long-term growth, Kingswood houses, in the Mitcham council area, increased by 40 per cent over five years to a median of almost $950,000.
Seacliff, in the southern suburbs, delivered the highest house value growth – up 12.6 per cent, while Lightsview units, in Adelaide’s north, increased by 14.2 per cent.
Mark Bradley and Jody Martin are selling their 58 Marine Pde, Seacliff home through Steve Smith and Lorraine Lee of Phil McMahon Real Estate and Mr Bradley said he hoped to see that strong value growth reflected in his future sale price. “We’ve seen values go up in recent years, particularly in our street which has become a tightly-held part of the area,” he said.
Savvy investors set to shift gears
ALL eyes will be on the state’s rental market next year as potential changes to negative gearing loom should Labor take power at the next federal election.
Labor has promised to reform negative gearing if it wins the next election so that it only applied to investors buying new properties – in the process, hopefully making housing more affordable for first home buyers.
The changes are set to shake up the state’s rental market, which had recorded a fairly solid year.
According to CoreLogic’s Best of the Best report, Elizabeth North houses delivered the state’s highest gross rental yield at 8.3 per cent, and Salisbury units delivered a 7 per cent return.
Adelaide apartments offer the highest rental yield within 10km of the city – returning 6.2 per cent over the past 12 months, while the top-performing houses were found in Athol Park.
CoreLogic analyst Cameron Kusher said Adelaide’s rental market had performed strongly on a national level.
“Compared to most other capital cities, rental returns in Adelaide are generally a bit stronger,” he said.
Mr Kusher said the rental market could change quite considerably should Labor win next year’s federal election and bring in changes to negative gearing.
“We think the changes could have an impact on the market as they’re trying to funnel demand to new properties … and new properties tend to be more expensive,” Mr Kusher said.
“Inherently, there’s more risk in new properties – we’re not seeing this that much in Adelaide at the moment – but when the market is falling, what you agree to purchase a property for and what it ends up being valued at when it’s built can be less.
“We think it will result in less investment overall, and over time, I think people that own negatively geared homes won’t be able to sell those to other people who can negatively gear, so there’ll be a smaller pool of buyers for those investment properties.
Mr Kusher said over time, it would lead people to focus more on rental yields rather than capital growth, potentially causing rents to increase.
“It’s not something that’s going to transition quickly – it’s going to take a while, but particularly in some of those sought-after rental locations in inner-city areas, you might see higher rental yields and might see rental growth pressures increasing.”
Harcourts chief executive officer Gregg Toyama said there were two sides of the negative gearing story.
“Negative gearing has been a good initiative in getting people to invest in housing, with investors adding to the rental market and open up properties for the rental market while getting themselves a good tax benefit,” Mr Toyama said. “However, I think abolishing negative gearing will cool the investors in the marketplace and it remains to be seen what effect this will have on prices.
“The positive aspect in abolishing negative gearing is that at least the people who have got into the market through it are grandfathered in and it will, I believe, open up the market for first home buyers, because there’ll be less investors in the market.”