SA property: The suburbs where you risk overpaying revealed

Looking to buy a property in SA?

New data has shed a light on where you can still get good value, and where you are at the greatest risk of overpaying.

SuburbData’s latest Overvalued and Undervalued report has revealed the 20 suburbs where current property prices sit most noticeably below comparable neighbouring areas, and which had experienced falling prices or subdued price growth in recent years.

It also revealed the suburbs where aggressive past price growth has pushed home values beyond what current local supply and demand can sustain.

According to the data, among those most undervalued was North Adelaide, Beaumont and Lightsview.

In North Adelaide, the typical house price is $1.1m – 21 per cent or $239,000 below its neighbours, while Beaumont houses have a typical house price of $1.7m – 21 per cent or $90,000 below its neighbours.

Lightsview houses have a typical price of $905,000 – 21 per cent or $137,000.

Other suburbs to have been identified as undervalued include Magill, Mansfield Park, Belair, Gilles Plains, Nairne, Flagstaff Hill and Brompton.

Jeremy Sheppard of SuburbData. Supplied

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SuburbData analyst Jeremy Sheppard said it was a challenging time to buy real estate due to the weakening market, but this did not mean there were no longer areas with growth potential.

“There are still plenty of areas around Australia where you are better off parking your money in a property than letting it sit in a bank,” he said.

“These areas have simply become harder to find. During boom times, like in 2021, markets like that were easy to find. You throw a dart on a board and hit one. Now you need to know where to look.”

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Mr Sheppard noted that there were other markets that required caution.

These overvalued areas include Old Noarlunga, Port Adelaide, Smithfield, Stirling, McLaren Vale, Toorak Gardens, Moana, Nailsworth, Payneham and Woodville South.

The danger of buying in an overvalued suburb was the threat of negative equity for those who purchased with small deposits, Mr Sheppard explained.

Some suburbs across Adelaide represent good buying, others not so much. Picture: Brenton Edwards

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“The risk is that if you buy in a market like this your home may sit there for a while without getting any return on your investment, or values may fall and you go into negative equity.

“That may not be a problem if you plan to stay there 10 years, as eventually prices in these areas will go up again, but you also never know when your circumstances change, when you may have to sell because of a change in work or a relocation.

“I’d also be cautious as an investor in these areas. And I would even exercise caution as a first-home buyer, unless you have a very large deposit, which not many do.”

James Packham of Harcourts. Picture: Supplied

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Harcourts Packham Property director James Packham said South Australia’s property market had continued to show impressive resilience and had headed into the new financial year with confidence.

“While higher interest rates have cooled many markets across the country, Adelaide and South Australia are still forecast to record annual property price growth of around 5 to 9 per cent, underpinned by strong buyer demand and limited housing supply,” he said.

“The rental market also remains one of the tightest in Australia.

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“Vacancy rates continue to sit well below pre-pandemic levels, meaning well-presented investment properties are leasing quickly and rental yields remain strong for landlords.”

See all 20 undervalued and overvalued suburbs at advertiser.com.au

– with Aidan Devine.

SA’s most undervalued suburbs

Data supplied by SuburbData

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SA’s most undervalued suburbs

Data supplied by SuburbData

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