More buyers want CBD apartments after slow Covid-19 period
Want to buy an Adelaide city apartment? You’re not the only one – more people are moving in for a slice of the CBD as the real estate market improves.
SA News
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Construction within the Adelaide City Council district is booming, with projects totalling $2.5bn either completed, under way or due to start this year.
New apartment buildings in the CBD and North Adelaide account for more than $1bn, with the remaining $1.5bn being invested in several major office towers.
They include a $470m tower on the site of the former Southern Cross Arcade on King William St, the $663m Lang Walker building on Adelaide Festival Plaza and the $300m tower on the former Planet nightclub site on Pirie St.
Real estate and development industry leaders say the amount of construction is a strong vote of confidence in SA as the pandemic continues.
Agents say the combination of the state’s borders reopening, a housing shortage and apartments becoming more affordable were behind a surge of interest in city living.
Official data showed there were 275 apartments built in the CBD in 2021, including Penny Place (152) and The Luminesque atop the Sofitel Hotel (69).
A further five apartment complexes are currently under construction or due to start this year. They include the $400m redevelopment of the Adelaide Central Market Arcade, Market Square, the $80m Victoria Tower on Grote St and the $250m development of the former Le Cornu site on O’Connell St, North Adelaide.
State government data shows the median sale price for an apartment was $487,000 in December 2021, slightly down from $507,000 at the same time the previous year. There were 718 sales in 2020 compared with 636 in 2021.
Property Council SA chief executive Daniel Gannon said Adelaide had become an investment hot spot.
“Throughout the pandemic, investors have been flocking to Adelaide, demonstrating the attractiveness and resilience of Australia’s most liveable city,” he said.
“Billions of dollars in commercial investment is raising the height profile of the CBD, complemented by strong residential sales.”
Mr Gannon said the return of overseas students would be a further boost for apartment sales, with hundreds coming on to the market in the city.
Booth Real Estate director Charles Booth said the price gap between a city cottage and an apartment had become “huge”, so the latter was the more affordable option.
“There is quality city apartment stock, so I think it will continue to grow as it rides off the back of the freestanding market,” Mr Booth said.
“The number of students and migrants coming back to Adelaide will also help, as well as people returning from interstate who have no issue living in an apartment.”
AC Connection Real Estate sales manager Victoria Wang said the demand for city apartments had boomed since state borders had reopened.
“More people are coming for open inspections for city apartments – the market is better for owner-occupiers and investors,” Ms Wang said.
“I think it is really good now and will continue … especially because many people feel like they cannot afford a house in the suburbs so are coming back to the city.”
MAJOR APARTMENT BUILDINGS IN ADELAIDE
COMPLETED IN 2021
Address: 17 Penny Place, pictured above
Developer: Flagship Property Holdings
No. of apartments: 152
Cost: $85m
Sofitel Hotel & Apartments
Address: 108 Currie St
Developer: Palumbo
No. of residential apartments: 69
Cost: $39.5m
Belvedere on Park
Address: 62 South Tce
Developer: Australia CPB Investments
No. of apartments: 40
Cost: $20m
250 East
Address: 250 East Tce
Developer: A joint venture between 250 East Pty Ltd and Pajo Projects Pty Ltd
No. of apartments: 14
Cost: Unknown
UNDER CONSTRUCTION
Park Tce. Residencies, pictured above
Address: 143-144 South Tce
Developer: SA Construction
No. of apartments: 22
Cost: $26m
The Cullinan
Address: 181-185 Waymouth St
Developer: Luks Investments P/L
No. of apartments: 129
Cost: $106m
Paragon on the Park
Address: 278 Park Tce
No. of Apartments: 21
Cost: $13m
MAJOR APARTMENT BUILDINGS GIVEN APPROVAL
Central Market Arcade
Address: Grote St
Developer: ICD Property
No. of apartments: 210
Cost: $400m
Construction expected to start: June 2022
One North Tce
Address: 1-8 North Tce
Developer: One North Terrace (Aust) Pty Ltd
No. of apartments: 191
Cost: $72m
Construction expected to start: Unknown
Solea Apartments
Address: 261-263 Pulteney St
Developer: KOZNO
No. of apartments: 68
Cost: $20m
Construction expected to start: N/A
200 East Terrace
Address: 200-206 East Tce
Developer: Global Intertrade
No. of apartments: 36
Cost: $40m
Construction expected to start: Currently under design, according to Minuzzo Project Management
Rymill Park Apartments
Address: 2-6 Hutt St
Developer: Rymill Park Apartments P/L
No. of Apartments: 38
Cost: $27m
Construction expected to start: Despite securing development approval, an objection has been received and now must go through the courts before construction can start. If successful, building would begin soon after.
Ray White Adelaide CBD director Andrew Downing said the city recovery had started about two months ago.
“Adelaide is finally becoming a destination place and people are telling people interstate to come live here,” he said. “They are finding value in the apartment market … prices are reasonable.”
Palumbo Group managing director Daniel Palumbo said apartments in its $150m Sofitel tower were snapped up quickly. Prices ranged from $450,000 for one bedroom to $1.6m for three bedrooms.
“We sold off the plan early and then people came in to our site office asking for one and we didn’t have anything to sell,” he said.
Prominent developer and Adelaide Central Market Authority chairman Theo Maras said the amount of inner-city investment was a “resounding vote of confidence” in how SA had managed the pandemic.
“With both commercial and residential there has been demand from both within Australia and overseas,” he said.
“People have found South Australia to be a safe and desirable place to live and invest.
“We have been exceptionally well priced, both in South Australian and world standards of property.”
Lord Mayor Sandy Verschoor said a younger demographic was being attracted to city living. “Covid-19 has triggered a resurgence of people who want a work-life balance and they know they can get that in the CBD,” she said.
HAPPY MOVE
Mary-Rose Aitken says she is “the happiest woman in the world” since making the move from Sydney to her Adelaide apartment.
She decided to leave the hustle and bustle of Sydney behind and buy an apartment on Gilles St in July – a move she wishes she had made years ago.
“Sydney was wonderful when I was working because I had a job that took me around the world but when I retired it become really small … and I didn’t feel like I was living my life,” Ms Aitken says.
“My sister lives in Adelaide and she said ‘why don’t you move to Adelaide’ … so I did. Now I’m the happiest woman in the world.”
Apartment living in the Adelaide CBD was attractive because of the abundance of parklands, transport and accessibility.
“I love the urban environment so living in the city is perfect for me,” she says.
“Since moving here I am so, so much a proud South Australian.”
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