Adelaide owner-occupiers who buy off-the-plan apartments in buildings converted from low-grade commercial stock will receive a five-year exemption on city rates, the City of Adelaide has announced.
The incentive scheme has been designed to help repurpose the city’s glut of ageing C and D grade office buildings, and to encourage more people to buy and live in the CBD.
City of Adelaide Lord Mayor Martin Haese said the rebate could save an apartment buyer thousands of dollars.
Until 30 September, buyers can also apply for the state government’s $10,000 pre-construction grant, obtain a stamp duty concession, plus potentially get the First Home Owner Grant.
“Combined with a range of state government incentives, it means people looking to buy and live in new city apartments could save tens of thousands of dollars in concessions,” Dr Haese said.
According to M3 Property Strategists research, as of May 2017 the Adelaide CBD office market comprised 10 per cent D grade buildings and 21 per cent C grade buildings. Vacancy rates are high, as more tenants shift into newer A grade and Premium grade properties.
Ben Yates, former Property Council of Australia South Australia president and managing director of Adelaide-based consultancy Development and Advisory, said the city had an oversupply of C and D grade office stock.
The City of Adelaide incentive was a positive move to tackle to issue, he said.
“Otherwise what do you do with [those buildings]? Especially with the vacancy rate we have,” Mr Yates said.
“Anything we can do to encourage conversions is a good thing.”
To date, the majority of successful office conversions have involved redevelopment from offices to student accommodation, he said.
Dr Haese said the incentive was part of comprehensive strategy to achieve council’s target of growing the number of residents in the heart of the city by 50,000 people by 2040.
“Both council and the state government are committed to stimulating residential population growth and improving housing affordability in the City of Adelaide,” he said.
“We know that city living is convenient and offers great lifestyle, social, economic and environmental benefits, and we hope that these measures will encourage more people to make the move and take advantage of all that the city has to offer.”
He said the council had already been “inundated” with enquiries.
Prospective purchasers will generally be eligible if the purchase contract is signed between 1 July 2017 and 30 June 2019, and they occupy the property as their primary place of residence within six months of contract settlement.