Michael Brooks: Why You Should Invest in Adelaide
    • 15 Mar, 2022

    Michael Brooks: Why You Should Invest in Adelaide

    Now is the time to start investing in the Adelaide property market. If you’ve been sitting on the fence about investing in the South Australian capital, there has rarely been a better time than now to start putting a plan into action. At Property Club, our national team of property experts have been keeping a close eye on the Adelaide property market forecast over the past few years, and the results are looking good.

    With new developments, fantastic prices, and a national movement of potential tenants, more and more investors are flocking to the city of churches. Let’s take a look at why Adelaide has suddenly become such an attractive investment prospect, and how you should approach entering its investment market.

    Why has investing in Adelaide become so popular? Over the last couple of years, Adelaide has become a hotspot for property investors. This investment boom has happened largely off the back of the raw numbers looking so good.

    • Property prices are up 24.8% for the year ending January 2022
    • The median house price for Adelaide is $750,000
    • Gross rental returns for houses are 4-5%
    • Rental prices have risen 8% in the last year
    • Overall vacancy rate in Adelaide is 0.7%

    Additionally, Adelaide has recently been named the third most liveable city in the world - which means it's also the most liveable in Australia. Adelaide has continued to excel in the areas of stability, healthcare, education, culture, environment, and infrastructure. As a result, we have seen the highest levels of interstate migration to Adelaide for the past 30 years.

    A city on the rise One of the best reasons to start investing in Adelaide’s property market is to capitalise on all the defence and infrastructure developments going on in the city. This will only increase the mass migration of people heading to Adelaide as they seek out new jobs resulting in a need for new rental properties to move into. Some of the major new defence contracts include:

    • The construction of 8 nuclear powered submarines
    • Collins Class submarine upgrade
    • Upgrades to the Hobart Class Destroyer systems

    All of these projects alongside new infrastructure work will drive more and more people to come and live in Adelaide, only strengthening the case to begin investing in property there.

    Invest in Newer Adelaide Properties With so many great property developments happening around Adelaide, there are certainly plenty of reasons for investors to be excited. After all, investing in new properties can reap a number of rewards for investors.

    To start, newer Adelaide properties generally have fewer maintenance costs in their first 5-10 years of ownership. They are also more attractive to prospective tenants, and they attract higher rent costs than older properties.

    Best of all, however, is that newer Adelaide properties provide much greater cash flow benefits for investors. This will allow them to expand their investment portfolio and take their investment aspirations to new heights.

    How this works Let’s say you purchase a brand-new Adelaide investment property with an internal size of 200sqm. This property would generate an average depreciation of $13,500 in its first year.

    If you, the owner, are in the 37% income tax bracket, then you be netting an average tax saving of approximately $20,200 across the first five years of ownership.

    If that Adelaide property was the exact same size, and you were in the same tax bracket, but it was built in 1998, then you would only have tax savings of around $6,200 across your first five years of ownership.

    Investing in the Adelaide property market with Property Club If you want to start investing in the Adelaide property market, but don’t know where to start, then consider becoming a member of Property Club today. Membership is completely free, but the benefits are nearly priceless. Sign up today by sending an email to enquiries@propertyclub.com.au.

    Reference to corelogic.com.au and the website https://www.bmtqs.com.au/tax-depreciation-calculator

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