First time homebuyers and investors flocking to Prospect for apartment units despite national surplus.

WE’VE been warned we could soon face a glut of apartment-style living but one Adelaide suburb is flying in the face of those concerns — 70 per cent of its unfinished units are already sold.

This apartment block has recently gone up on Churchill Rd, Prospect. Picture: Bianca De Marchi

• 1500 new apartments in Adelaide CBD by end of 2017
• Stamp duty concessions for off-the-plan apartments for another year
• Off-the-plan apartments are under the spotlight as prices slump

MORE than 70 per cent of unfinished apartments across Prospect have already been sold despite recent figures revealing a 70,000 oversupply of apartment buildings across Australia.

Height restrictions on multi-level apartment blocks outside the CBD were increased from three to five storeys in 2013 along urban corridors and Prospect Council has since approved 13 multi-level apartment blocks at a combined value of $40 million.

Two of the blocks have already been built, six are under construction and a further five have approval but construction has yet to start with developers given up to a year to break ground.

The State Government extended its stamp duty concessions of up to $15,500 for buyers purchasing off the plans until 2017.

It also broadened the eligibility to include all suburbs, not just those less than a few kilometres from the city.

Of the six developments under construction across Prospect, 65 out of 92 dwellings have been sold.

One of the sites on Churchill Rd that has been redeveloped into multi-level living. Picture: Bianca De Marchi

The two completed apartments on Allan St and Churchill Rd have sold 22 apartments out of a possible 41.

Property Council SA director Daniel Gannon attributed the strong interest to stamp duty concessions and buyers wanting to live near the city.

“The stamp duty concession would absolutely be a stimulus for investors and first-time homeowners,” Mr Gannon said.

“The urban growth corridor that has been opened up has changed the way people are viewing living in Metropolitan Adelaide.

“We have seen a cultural shift moving to vertical living rather than horizontal.”

Across the other side of the city, this 9-storey apartment block is planned for Greenhill Rd, Parkside.

According to a report by JP Morgan in June, there is an oversupply of apartments nationwide, with as many as 70,000 dwellings vacant.

When asked if there was a concern supply may outstrip demand in SA, Mr Gannon said Adelaide’s market was different to those in Sydney, Melbourne and Brisbane.

“It’s probably that we haven’t transitioned to higher-living in Adelaide as quickly as our neighbours on the East Coast,” he said.

“Ultimately the market will always decide.

“The market is defining more stock is required because the apartments are selling well.

“The other component that has contributed is that the design quality has increased.”

An eight-dwelling apartment building at 143 Prospect Rd has sold seven of the eight properties in the past year — despite not being completed.

Real estate agent Toby Shipway said most of the sales were from owner-occupiers rather than investors.

“Generally only investors buy properties off the plans,” Mr Shipway said.

“But of the ones we’ve sold, only one is an investor, the rest are planning to live there.”

Prospect Mayor David O’Loughlin said interest in apartments in the district had exceeded expectations.

“It will bring more people to our local shops and to local events,” Mr O’Loughlin said.

“Our main roads have been underperforming in terms of rate generation for years.

“This will lift their performance up to the rest of major roads out of the CBD.”

Mr O’Loughlin said the apartment buildings provided a “strong economic reason” for a tram along Prospect Rd.

Prospect planning director Nathan Cunningham said the council was wary of not overcapitalising.

“The council has worked towards its strategy of promoting growth … while ensuring there is an appropriate balance of heritage conservation throughout its suburbs,” Mr Cunningham said.

In February, residents called for stricter rules on high-rise development applications to ease an increase in traffic in the area.

Prospect Residents Association President Elizabeth Crisp told the City North Messenger at the time that a lack of car parking was fast becoming one of the biggest gripes of ratepayers.

Prospect Rd resident Travis Algate said in February that car parking congestion was an unfortunate side effect of increased development in the area and many residents were concerned about large buildings overshadowing their homes.