The SA Property Landscape report by BDO and Land Services SA provides analysis into property values, transactions and market characteristics over the past decade.
The report’s authors found that the City of Holdfast Bay has the highest commercial land value for small parcels, and that in the 2017-18 financial year the highest capital growth in commercial hospitality property was in the City of Prospect.
The report concludes that this growth was driven by the completion of the Palace Nova cinema complex on Prospect Road.
Co-author Brenton Pike from Land Service SA said that progressive councils are driving more capital growth for properties in their areas.
“The City of Prospect invested in their infrastructure, which attracts citizens and therefore demand for retail commercial properties increases, which grows demand and potential increase in values,” Pike said.
Talis Evans from BDO, who provided analysis for the report, agreed that the policies and activities of councils have had an impact.
“The real opportunity for councils is around economic development – wanting to see change, wanting to see growth, and providing the right local economic conditions, (including) upgrading footpaths, allowing outdoor hospitality to occur, dealing with noise and supporting liquor licencing applications,” he said.
“The Palace Nova is part of the Village Heart in Prospect, which is a particular focus of that council and its economic development team to achieve a certain type of commercial outcome.
“And that’s good for a local government generally because it does one thing in particular, and that’s reduce the rates burden for residential rate payers.”
Talis, a former Elected Member of the City of Prospect, said it is a great time for councils to push further into driving economic activity in their Local Council Area.
“From a local government perspective, we’ve just had local government elections. Local governments have traditionally been focussed on core services, but what we are seeing now is that councils that are focussed on economic activity are starting to reap the rewards, and that’s something that is evident in the (SA Property Landscape) report.
“A lot will hinge on what happens with planning and what individual local governments do with their strategic plans with their new elected member bodies coming into office.”
The report also found that 25 per cent of housing stock in South Australia was built after the year 2000, with build numbers growing over the past three years to almost 9,400 last financial year. That growth has in part been driven through subdivision, with Port Adelaide Enfield, the City of Onkaparinga and the City of Charles Sturt leading the charge in terms of new parcels of land created.
More than 90,000 new parcels of land were created in the Adelaide metropolitan area through subdivision in the decade to 2018.
“If we look at urban sprawl areas… naturally we are seeing a lot of subdivision activity there driving high rates of construction,” said Evans.
“What is really interesting is that when we look at (the report) we can see that the largest numbers of parcels created isn’t on the urban fringe. Areas like Prospect and Unley, where there is arguably quite a lot of debate around urban densification, aren’t the areas that have experienced the most number of parcels created.
“That’s also a product of the size of land parcels in those areas – if you have a small block of land you can only really chop it in half, whereas if you have a big block of land you might be able to chop it into eight parts. So certainly urban development plans are having an impact.”
Pike said councils strategy have a big role to play in driving construction and jobs growth in the economy.
“It’s critical. The development plans are the foundations for which developers have to comply with to create parcels. They are front and centre in terms of setting the foundations.”
This article is sponsored by BDO Adelaide.