Love affair with benefits

The way to a person’s heart is through their stomach – it’s a saying that certainly rang true for Peter Ni one Friday night last June. The Sydney property investor, and his wife, Olivia, spent their first night in Adelaide having dinner on Gouger St when Mr Ni fell in love with the city. The popular strip in the CBD was buzzing, and the food was amazing and well priced. By the next day, Ni, 48, bought two off-the-plan apartments at the West Franklin development in the city’s west end – worth $1.1 million combined.

“I can still recall it,” says Ni, who runs an online retail and wholesale business. “After dinner, I went back and jumped on the internet to do some research. The next day, I visited the showroom at West Franklin. I spent one-and-a-half hours there, then I decided to buy two units off the plan.”

Ni’s portfolio includes 12 commercial and residential properties in Sydney, Queensland and Tasmania. He says he is increasingly turning his back on Sydney as the property market becomes more unaffordable, in favour of cities like Adelaide. “Of course, everyone wants to get a profit in a short term but, for a property investor, I think, the risk is another thing to consider,” he says. “I want something which is stable and gives, in the long run, more consistency. We think Adelaide is more steady and there are less bubbles. The (property growth) is only one digit, which is more safe, compared with Sydney and Melbourne.”

Ni is part of a growing group of interstate investors shunning their local property market and instead looking to Adelaide.

There is no official data to show how many homes are being snapped up by interstate investors but according to there have been more than one million internet searches on South Australian properties from the eastern states from January to June. The number of searches from Victoria was up 68.6 per cent, while New South Wales increased by 22.8 per cent.

Real Estate Institute of South Australia (REISA) chief exec-utive Greg Troughton says the novelty of double-digit capital growth in the eastern states has worn off and investors, often mums and dads on a quest to becoming self-funded retirees, are turning to Adelaide to get value for money. The result is an increasing interest of interstate investors in the past 12 to 18 months. “Anecdotally, members are consistently telling me now that interstate investors are a feature in their sales,” Troughton says. “We are rock solid on three or four per cent (capital growth) every year. And that, I believe, is a pretty good balance between those in housing knowing they are getting a return for their dollar as well as those wanting to get into the market.

“You can imagine the word unaffordable comes up a fair bit in Sydney and Melbourne whereas we remain an affordable place, not only to buy but certainly to invest as well.”

Property investor Ni, who migrated from China to Australia in 1998, calls Adelaide “very special”.

“It’s a university city. It attracts a lot of people from overseas,” he says. “The Government is focused to bring some changes to the CBD, including new buildings, services and infrastructure. They spent a lot of money on the new hospital.

“Traffic is minimal – way better than Sydney and Melbourne.

“I trust the Adelaide market.”

WORDS – Nadja Fleet

Peter Ni invests in Adelaide because…

The city is one of the most liveable in the world

Adelaide has reinforced its place in the coveted echelon of the world’s most-liveable cities, ranking fifth for the sixth consecutive year.

There are plenty of government incentives

By 2040, Lord Mayor Martin Haese wants to see the city population double to 50,000. In a bid to stimulate growth, the council announced earlier this year it would offer residents who purchase off-the-plan residential dwellings or apartments a “five-year holiday” from rates. The offer, which will expire in June 2019, could save potential buyers thousands of dollars. It comes on top of other initiatives, including savings on stamp duty, the $10,000 pre-construction grant from the State Government and the first home owner grant. “There has never been a better time to live in the City of Adelaide,” Mr Haese says.

The city is coming to life

Adelaide is also undergoing a major transformation. A near-$1 billion dollar redevelopment of Adelaide’s Riverbank is about to be completed, including a major Festival Centre upgrade and overhaul of the nearby plaza. The upgrade comes after the success of the newly upgraded Adelaide Oval. The city’s west end has been turned into the largest medical precinct of its kind in the southern hemisphere with the opening of the new Royal Adelaide Hospital, the South Australian Health and Medical Research Institute and several university buildings. Construction of the highly anticipated Adelaide Casino upgrade will start next year after its owner, SKYCITY Entertainment, finally gave the go-ahead for a $330 million overhaul last July.

Adelaide is linked to China

The largest airline in Asia, China Southern, announced last month it would fly five seasonal direct flights a week between Guangzhou and Adelaide from December. The move is a massive win for the city. Chinese visitors contribute $315 million to the visitor economy with a target set for $450 million by 2020.

It is an affordable, steady and long-term growth market

Adelaide continues to be a reliable performer for home value growth, according to the CoreLogic Hedonic Home Value Index released earlier this year. Adelaide house values were up 3.5 per cent year-on-year. Its median house price is sitting at $435,000 and homes on average are delivering total gross return of
7.8 per cent.