Apartment builds worth $1bn play into Adelaide City Council’s ambitious growth plan
Residential buildings worth $1bn are currently under construction in Adelaide’s CBD, but experts have issued a warning about the ambitious plans. See the map here.
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Residential developments worth more than $1bn are under construction in Adelaide’s CBD, with a further 4000 apartments or student accommodation either approved or under assessment.
Adelaide City Council has an ambitious plan to grow its population from 26,120 residents to 50,000 people by 2036, with affordable housing and larger households part of its plan.
Work has started to create 1000 residences through major projects such as the $250m Eighty Eight O’Connell redevelopment and $110m Cullinan tower on Waymouth St.
Other apartment buildings under construction include the $400m Market Square development, a $130m East Tce complex and the $200m Victoria Tower on Grote St.
Industry experts say the level of investment and development showed business confidence in the city after a difficult few years due to the coronavirus pandemic.
REISA chief executive Andrea Heading said the number of developments were “a direct reflection of supply increasing to meet the major demand coming through”.
“The demand is from intrastate and it will then give people in an established family home in the suburbs to sell that and then downsize – currently there’s no option,” she said.
“We would love to see it open up a market so that bigger family homes become available, creating a circular economy.
“There is also the perfect storm of (international) students returning to SA and they’re needing accommodation options.”
Master Builders chief executive Will Frogley said SA had emerged from the pandemic “in far better shape” than the rest of the country providing a jobs boon for the construction industry.
Property Council SA executive director Bruce Djite welcomed the private investment at a time when the state faced a housing shortage.
“Construction activity is a vote of confidence in South Australia and given the urgent need for housing, private sector led apartment projects that inject jobs and support population growth are welcome,” Mr Djite said.
Currently, rental vacancies in the city are 0.9 per cent and in North Adelaide 1.3 per cent.
In the year to February, there were 564 city apartment sales for a median price of $460,000, while in North Adelaide there were 69 sales for median price of $556,000.
The Property Council supported the council’s ambitious population plan, however it warned “ambition must be backed with action”.
“A comprehensive private market-led policy development process is the only sustainable way to lift residential housing options at scale to the targets outlined in the (council’s) housing strategy,” Mr Djite said.
The council last month adopted its 10-year Housing Strategy, which states 1000 new homes are needed each year to reach the population target, based on occupancy of 1.8 per household.
Lord Mayor Jane Lomax-Smith said the city previously had a population of 50,000 people in densely populated cottages, but now 40 per cent of homes only had one resident.
“Now, growth in residential numbers will require apartment dwellings and we would want it attracting a more diverse, larger household than the current trend towards single person occupancy,” Dr Lomax-Smith said.
“If we want more people living in the city, our housing stock needs to be diverse and cater for young professionals, families, students, and retirees.”
The housing strategy highlighted goals to deliver 50 homes annually through adaptive reuse of under-utilised buildings and attracting investment to deliver 600 affordable rentals by 2028.
The council, in an attempt to increase housing availability, last year bought a Flinders St carpark for housing and sold the Franklin St bus terminal for a mixed-use development.
It has also partnered with developers on joint projects, including its venture with Commercial & General for Eighty Eight O’Connell, in North Adelaide.
The development, which includes three high-rise apartment towers, is on track to be completed in the first half of 2025 with 80 per cent of its 158 apartments sold – worth $230m.
Commercial & General executive chairman Jamie McClurg said sales inquires for the remaining apartments had been at some of the highest levels since the project was announced.
“With each of the tower cranes now having reached their full heights, this interest comes as no surprise and we’re certainly anticipating it will remain strong as we head toward completion,” Mr McClurg said.
“The City of Adelaide’s ongoing investment in the O’Connell Street landscape is already proving – and will continue to prove – fundamental to the creation of a vibrant place for people to return and as a destination for people to visit.”
The majority of apartments sold will be owner/occupier with the majority from within a 5km radius including Michael Reu.
“We saw it as a once-in-a-lifetime opportunity to purchase a city-fringe apartment of this quality,” Mr Reu said.
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