Magill SA Property Investment

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## 2. Market Overview - Median house price: $1,490,000 - Median unit price: $670,000 - 1‑year price growth: 19.3% - 5‑year CAGR: 5.4% per year - 3‑year growth forecast: 13.5%

*Days on market* – data not available (N/A).

Signal: Strong recent price acceleration and a solid multi‑year growth trend point to a seller‑favourable market. Buyers will need to act quickly and may have to accept a premium, while sellers can command high prices.

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## 3. Rental Market - Median weekly rent: $690 / wk - Gross rental yield: 2.4%

*Vacancy rate* – N/A *Demand rating* – N/A

Implication: Yield is modest, indicating that investors should rely more on capital growth than on cash flow. The steady rent level supports a stable long‑term rental income, but the low yield suggests limited upside from pure rental returns.

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## 4. Short‑Term Rental Opportunity - STR nightly rate: N/A - STR occupancy: N/A - Estimated annual STR revenue: N/A

Conclusion: With no STR data, we cannot quantify the short‑term rental upside. Given the modest long‑term yield, investors should treat LTR as the default strategy until STR market data becomes available.

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## 5. Infrastructure & Growth Drivers All infrastructure, transport and employment data are N/A. The strong price growth and forecast imply underlying demand drivers (e.g., proximity to Adelaide’s CBD, lifestyle appeal), but specific projects cannot be cited from the supplied data.

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## 6. Bull Case If the 3‑year forecast of 13.5% materialises:

• House price scenario: $1,490,000 × (1 + 13.5%) ≈ $1,690,000 after three years – a capital gain of roughly $200,000.
• Unit price scenario: $670,000 × (1 + 13.5%) ≈ $760,000 – a gain of about $90,000.

These figures assume the growth trajectory continues without a market correction.

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## 7. Risks | Risk | Detail (with numbers) | |------|-----------------------| | Price correction risk | 19.3% 1‑yr growth may attract speculative buying; a reversal could erode capital quickly. | | Yield pressure | Gross yield of only 2.4% leaves little buffer if rent falls or expenses rise. | | Vacancy uncertainty | Vacancy rate is not provided; a rise could further depress cash flow. | | Supply pipeline unknown | No data on upcoming developments; new supply could increase competition and cap price growth. | | Interest‑rate sensitivity | High median house price ($1.49 m) means larger loan sizes; rate hikes could strain cash‑flow margins. |

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## 8. The Play - Entry range: - House: around $1,490,000 (median) - Unit: around $670,000 (median)

• Yield target: aim for ≥2.4% gross yield; consider properties with lower purchase price or higher rent to improve cash flow.

• Watch signals:
• - Release of days‑on‑market data.
• - Vacancy rate trends.
• - Any announced infrastructure or new housing supply.
• - Changes in the 3‑year growth forecast.

• Recommended strategy:

By focusing on capital appreciation while maintaining a minimum 2.4% gross yield, investors can capture Magill’s strong growth momentum while managing cash‑flow risk.