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Reproduced with permission.
The Adelaide and South Australian property market has remained fairly steady over the past year.
According to RP Data, Adelaide property values fell by 0.8%. Most capital cities experienced a slight property price fall in 2012, with Melbourne experiencing the greatest annual drop of 2.9%. This has resulted in a median house price of $395,000 and a median unit price of $325,000, which makes Adelaide the cheapest mainland capital city. Over the long term (10 years), Adelaide house prices have increased at an average rate of 6.4%pa, which is better than the national average of 5.1%.
So far as demand for property is concerned, the number of properties sold is well below the average. This lack of demand for property is being experienced around most of the country which helps explain the drop in property prices.
Enough of the past, what about the future?
Major infrastructure projects are a vital element of a healthy economy and also a very good leading indicator of capital growth in property prices. Adelaide and South Australia has plenty of major projects on the go. Below I have listed just a few of these projects and the suburbs that should be positively impacted.
The new Royal Adelaide Hospital (RAH)
This project is valued at almost $2 billion and will replace the existing hospital which was opened in 1840. This new hospital will have 800 beds and will be able to take 80,000 admissions per year. It is being built in the western end of the city, on North Tce. Suburbs that should benefit from this project are the inner western suburbs of Mile End, Torrensville, Thebarton, Hindmarsh, West Hindmarsh, Bowden and Brompton.
For more information, go to the following website: https://www.rah.sa.gov.au/homepage.php
South Australian Health and Medical Research Institute (SAHMRI)
This iconic building is currently being constructed opposite the City West campus of the University of South Australia and adjacent the new RAH. Its research will be focused on areas such as cancer, nutrition and metabolism, infection and immunity, mothers and babies, heart disease and the mind and brain. Due to its proximity to the new RAH, the suburbs that will benefit the most from the SAHMRI are as listed above for the new RAH.
For more information, go to the following website: https://www.sahmri.com/
Southern Expressway Duplication
What has been a one-way highway since its completion is finally being upgraded so that traffic will be able to flow both ways at all times of the day. This project will cost over $400 million and will be completed by the middle of next year. This will bring Adelaide’s southern beach side suburbs and the McLaren Vale region closer to the CBD. Suburbs set to benefit from this project are those at the entry and exit to the Southern Expressway and adjacent the exit and entry ramps. These suburbs include Bedford Park, Darlington, Old Reynella, Christies Beach, Port Noarlunga, Port Noarlunga South, Seaford and McLaren Vale.
For more information, go the following website: https://infrastructure.sa.gov.au/south_road_upgrade/northsouthcorridor/south_road_superway
South Road Superway
This $842 million project is the biggest single investment in a South Australian road project. It is a 4.8km non-stop corridor, comprising of a 2.8 km elevated roadway, linking the Port River Expressway to Regency Road. This is a very important piece of infrastructure for those investors looking for industrial property. Suburbs to do well so far as industrial property is concerned include Regency Park and Wingfield.
For more information, go to the following website: https://infrastructure.sa.gov.au/south_road_upgrade/northsouthcorridor/south_road_superway
If you are looking to invest in a regional area of South Australia, I’d suggest you have a very close look at the proposed Hillside mine on the Yorke Peninsula which is set to begin construction within the next 12 months. It is waiting for government approval and finance for construction but it is currently Australia’s largest undeveloped copper project. One of the great advantages of this mine is that it is not in the middle of nowhere; it is only 1.5 hours from Adelaide and very close to infrastructure such as a shipping port, electricity and water. There is no guarantee that this will mine will start construction this year but if and when it does, the towns to benefit the most are Ardrossan, Pine Point, Black Point and Port Vincent.
For more information, go to the following website: https://www.rexminerals.com.au/
The above are only just some of the major projects currently underway in South Australia. Others include the Seaford Rail Extension, redevelopment of Adelaide Oval and revitalization of the Adelaide Riverbank Precinct. If you are serious about investing in Adelaide or South Australia, I strongly recommend you visit the Infrastructure SA website. As I am based in Adelaide, I am also happy to have a chat to you at the next PPA seminar in Sydney on 26th Feb (“How YOU can build the perfect property portfolio”), course or at one of the Home Buyer Shows.
Happy (South Australian) House Hunting!
Written by Peter Koulizos, university lecturer, author and buyers advocate.