Where house prices have jumped by 130 per cent in the past five years but still only cost $435,250
A northern Adelaide suburb has recorded an astonishing 130 per cent price growth over the past five years – the largest in the nation – but still has a median house price of just $435,250.
About 23 kilometres north of Adelaide’s CBD, the booming suburb of Elizabeth Downs has become a great investment opportunity for landlords, developers and owner-occupiers, according to several local real estate agents – but it is one of a small pool of rapidly dwindling affordable suburbs.
Real estate agent Brendon Ly of Edge Realty says he’s seen more buyers turn to Elizabeth Downs because they’ve been priced out of inner city suburbs.
The median house price in Adelaide is $929,972 – more than double Elizabeth Downs’ median house price, according to Domain data.
Ly says supply in Elizabeth Downs hasn’t been able to keep up with demand, and competition has pushed the median price up by $30,000 over the past three months alone.
“Some properties that we sell, we’re kind of shocked that it does go for that [higher] price,” he says.
Domain’s chief of research and economics, Dr Nicola Powell, says when there are fewer affordable suburbs, the ones that remain, like Elizabeth Downs, tend to see higher levels of price growth over a shorter period.
“If this is one of the only suburbs that offer greater affordability for buyers [in Adelaide], then we could continue to see a growth of that level in this area because of that narrowing window of affordability, and buyers fear being priced out.
Powell says this price growth is unsustainable in the longer term, but it also raises a more profound question: “What is the affordable housing pool in Adelaide? And I suspect over the last five years, it’s dwindling fast”, she says.
“It showcases that buyers are after affordability and how lacking it is, because we’ve seen a structural change in the price point of Adelaide’s housing market over those five years, and when you’re thinking about the affordable end of the housing market, it has quite a wider pool of buyers, usually first-home buyers and investors,” she says.
The price landscape of the area has changed significantly thanks to interstate investors, who now make up the majority of buyers in Elizabeth Downs, says agent Hayden More of LJ Hooker Craigmore | Elizabeth | Salisbury.
“The purchase price has just gone way out of whack. At the moment, people are paying crazy amounts of money, like $550,000, $600,000 and $650,000,” he says.
More says that many investors who purchase large blocks of land are looking to subdivide them and develop multiple properties to sell again later.
He says the suburb has seen the most “absolutely ridiculous” price changes in the past eight months.
“[At the start of the year] we were advertising a free-standing home of 800 metre-squared land size, three bedrooms, anywhere from $400,000 to $440,000. Now, they’re getting advertised anywhere from $500,000 to $550,000, even $600,000, depending on the condition.
“It is the same with the semi-detached properties, which are attached to the adjacent home. They were $300,000 to $350,000. And now we’re looking at anywhere from $400,000 to $450,000.
“There’s no sign of it slowing down.”
The demand for property in the suburb has reached fever pitch, says local agent Dominic Cirillo of Ray White Craigmore.
“We are getting 12 to 15 groups at an open inspection and getting five to seven offers on that day,” he says.
Despite the market being on fire, it is still one of the most affordable suburbs in Adelaide, says Cirillo.
“You’re getting large allotments, good dwellings, good homes, that is at an affordable rate,” he says. “However, with $430,000, you won’t find a home like a traditional three-bedroom home on say, a 600 to 700 square metre allotment anymore. You will be buying a semi [detached house].”
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