Tea Tree Gully SA Property Investment

THE MARKET

Tea Tree Gully has compounded at 12.2%/yr over 5 years — a house that cost $508,961 in 2021 is worth $905,000 today. Properties are sitting on market for 43 days (roughly balanced conditions). At the same growth rate, today's median reaches $1,609,211 by 2031.

- **Median house:** $905,000 | **Units:** $314,335 - **Gross yield:** 3.5% | **Net yield:** 2.0% - **5yr price CAGR:** 12.2%/yr | **3yr forecast:** 13.8%/yr - **Population:** 29,691 | **Owner-occupier rate:** 36% | **Affluence:** High

- **Supply pipeline:** Low — Price growth outpacing new supply, limited development pipeline

RENTAL SNAPSHOT

- **Vacancy:** 0.4% (improving) | **Rental demand:** Very High - **Median weekly rent:** $610/wk | **Days on market:** 43 (stable) - Landlord market — rents likely to keep rising.

SHORT-TERM RENTAL

- **Median nightly rate:** $155/night | **Occupancy:** 64% - **Estimated annual STR gross:** ~$36,208/yr - **vs long-term rent:** $31,720/yr (+14% STR premium — factor in higher management costs)

INFRASTRUCTURE & CATALYSTS

- No major confirmed infrastructure projects on record. - **Transport:** Standard suburban transport access

BULL CASE

If Tea Tree Gully maintains 3%+ annual growth and vacancy stays below 0.8%, median prices could reach $1,040,750 within 3 years with yields compressing slightly as capital values rise.

BEAR CASE

A market correction or interest rate shock could see prices in Tea Tree Gully pull back 10-15% from $905,000, with vacancy rising to 0.7% and rental yields softening as tenants gain leverage.

KEY RISKS

- No significant risk factors identified for this suburb

COMPARABLE MARKETS

- **Adelaide CBD** (SA): $948,000 median, 3.6% yield, 7.7% 1yr growth - **Albert Park** (SA): $880,000 median, 3.7% yield, 13.5% 1yr growth - **Aldinga Beach** (SA): $790,000 median, 4.0% yield, 8.2% 1yr growth

THE PLAY

Tea Tree Gully presents a compelling investment opportunity. The combination of solid fundamentals and very high rental demand supports entry at current price levels. Proceed with due diligence on specific properties. Target gross yields above 3.5% and prioritise properties with value-add potential. Consider timing entry around the current growth phase of the market cycle.

- Entry range: $814,500 – $995,500 - Minimum gross yield to target: 4.5% - Watch signal: vacancy staying below 2% and days on market falling below 35

This analysis is for informational purposes only and does not constitute financial, legal, or investment advice. Seek professional advice before making investment decisions.