It's also proven that there are better returns to be made in outer ring suburbs than inner ring suburbs and in my view you are less exposed during a down turn.
For people purchasing properties in the Eastern Suburbs or even in the CBD its more than just looking at returns. Being in the right school zone and proximity to work place (i.e CBD since most of Adelaide's work force is based there) is definitely a top priority. I'm not sure what kind of returns you are referring to, but in the past 1 year I've seen numerous sellers in eastern suburbs making a handsome capital gain on their property purchases.
Also, you can't put a price to prestige. Many people would kill to have a property in Burnside or College Park. Something to pass down to their kids.
Go to Burnside village on a weekday morning and you see tons of soccer moms sipping their latte in cibo in their designer outfits. While their X5s or Q7s are parked in the carparks. It's a lifestyle choice.
If it was all about returns, surely you won't see Eastern suburbs houses in the right school zones selling like hot cakes and foreigners (mainly Chinese buyers) dominating the weekend open inspections. Every weekend I witness this unfolding before my eyes.
Case in point;
http://www.realestate.com.au/property-house-sa-burnside-119404471
Property was supposed to go for auction this weekend. I went for the 1st open inspection before Easter. As usual it was packed. No surprises. On Monday I receive a call from the agent. Property has sold prior. I asked him how much it sold for, he tells me $740K!! The price guide was $640K. Even the agent tells me he was surprised at the offer. Of course, the vendor who is a local Australian grabbed the opportunity and sold prior to auction. Who wouldn't? The agent told me the buyer is not local. 26A which is the other semi-d sold for $540K in 2012.
I'm sure you'll be hearing a similar story from me in a few weeks time. Just a different property in the eastern suburbs.