Top 5 Tips when Investing in Adelaide
Today I want to talk about considering Adelaide as a place to invest your money, particularly if you’re an interstate investor looking for somewhere around the country to park your cash outside of your own state.
For me, there’s lots of wonderful reasons to consider Adelaide. For anyone who’s ever been there, they can see that it’s a beautiful place. For the people who live there, they know it’s a wonderful place. But what’s interesting is the perception of Adelaide, particularly from the East Coast, is that it’s a place you probably wouldn’t consider buying in. But this is something you should seriously reconsider.
The number one reason why you should reconsider it is that it’s a very stable market place.
If you have a look, historically it continues to perform at a very stable level. I don’t see these enormous highs, then these enormous lows. So, if you’re investing for the long term, it kind of makes sense that it’s a good place to park your cash, because you know you just get this consistent performance.
On top of this, if you think about the fact that there’s affordability issues all over the country — or particularly on the mainland east coast of Australia — there’s really good lifestyle opportunities for people to consider moving to Adelaide. In fact, by 2050 an extra half a million people are going to move to this city. So, it’s important that you do consider Adelaide as an option for you, given the fact that it’s a vibrant city, expecting a lot of people moving into it, which will put pressure on prices over time.
A second thing to consider about Adelaide is, it’s very livable.
It doesn’t end up number one in terms of the top cities around the world like Melbourne does, but it often ends up in the top 10, which is an awesome achievement because it’s got the lifestyle. It’s got beautiful universities, it’s a really vibrant place to be, it’s nice and relaxed, and the people are really friendly. So, it’s got this livability, and is considered the 15-Minute City where they can drive around and usually find a car park at the front of the place they’re arriving at. They have this expectation that that’s just something that they can do too, so it’s important to keep in mind that you buy properties that are within 15 minutes of the lifestyle drivers. I remember talking to a client once about buying a house for them to live in, and it was going to take them 20 to 25 minutes to get into the city to go to work and they said, “That’s too much.” I’m like, “20 to 25 minutes is too much?”
And they’re like, “Absolutely!”
If you think about Melbourne or Sydney, that’s sometimes from your letterbox to suburbs away. In peak traffic, if it was 20 minutes you’d be happy! But in Adelaide it’s the 15 Minute City. So keep this in mind. You want to be 15 minutes from the lifestyle drivers.
So my third point is: what are the lifestyle drivers?
It’s pretty clear. It’s proximity to the beach and proximity to the city. Can I get to my job in the morning during the week? Can I get to the beach on the weekend and have a good time? Understanding this means that if you’re looking for real estate, try and get both if possible — but at least one.
Because if you think about the eastern suburbs about Adelaide, they don’t necessarily have that proximity to the beach — but they’ve got the geographical limitation of the mountain range, as well as the beautiful schools in the area and the leafy streets that get us through to the city. Not to mention some of the most amazing stone cottages in those eastern suburbs.
So understand these lifestyle drivers. Let’s try and get two of them; but at least have one of them, where you’ve got access to one or the other another.
My fourth point is: the quirk of buying in the Adelaide marketplace is they have this two-day cooling-off period without penalty.
Quite often in the other states, if you have a cooling off — like in Melbourne — there is a financial penalty that can be charged by the vendor if you do call off. Whereas in Adelaide: zero penalty.
What does this mean for you as a negotiator?
Well, you can put a deal together and not necessarily put any conditions in place. In fact: think about the building and pest inspection. They know that there’s two days for calling off, and the builders over there know how to hightail it very quickly in the first 48 hours to get it done. So you can put an offer in with no conditions. Put the builder in, get the property checked, and if there’s something wrong with the building, you can just cool off at no penalty. It makes it quite straightforward to do a deal.
It’s a quirk you need to understand to make sure that you put yourself in the box-seat to buy, particularly if you’re from interstate.
My fifth one is South Australians, and people in Adelaide, are known for being very parochial.
Which means they protect their own, and they think that Adelaide … quite often a lot of investors in Adelaide don’t want to invest outside of Adelaide, for example.
So what does that mean for interstate investors?
The real estate agents can be a little bit suspicious of outsiders. They like to deal with the locals. They like to deal with the local investors. They like to deal with local buyers. So you’re going to have to be persistent. If you put a phone call into the agent, they don’t return your call. Keep calling them back.
Understand that there is this parochialism existing in this city. For you, coming from interstate, you need to overcome this to make sure that you don’t get beaten on a really great property because you have that interstate feel and that interstate look about you. They want to make sure that they sell it to a local. So it’s important that you understand the parochialism, which actually exists in this city.
So there you go! I think there’s some wonderful reasons to consider the city of Adelaide if you’re considering building a multiple property portfolio with borderless investing in mind. If you are considering buying in this city, these are the things I think that you should think about before you buy your next property there.