Adelaide is one of the brightest stars in the Australian real estate firmament and it’s likely to continue to sparkle because it’s underpinned by the nation’s strongest economy.

In 2023 Adelaide was a national leader on price growth. While media has been obsessing over Perth as the nation’s boom property market, Adelaide has been doing as well or better – depending on whose data you believe.

According to the national real estate website Domain, Adelaide was No.1 on house price growth last year, with its median house price rising 12.7%, ahead of Perth on 11.9% and Sydney’s 10.6%.

In the apartment market, Adelaide ranked No.2 nationally, with its median apartment price rising 13.2%, a little behind Brisbane’s 14.2%.

PropTrack, the research arm of realestate.com.au, has different figures and ranks Adelaide No.2 on house price growth in 2023, with its median house price rising around 11%, behind top-ranked Perth and double the national average of 5.4% growth.

In the apartment markets, according to PropTrack, Brisbane had the highest increase in its median unit prices, with Adelaide and Perth both close behind with growth about double the national average.

Whichever way you look at it, Adelaide had a stellar year in 2023 – but this is a continuation of the South Australian capital’s strong performance over a number of years.

In 2022, when several of the major cities recorded price decline, Adelaide continued to produce steady growth.

And it is this consistency of performance, in various economic climates, that is the hallmark of the Adelaide market. 

Hotspotting closely monitors sales activity in all the markets across Australia and Adelaide has produced consistently strong numbers in the past 3-4 years.

There are three standout factors helping to drive this performance: South Australia’s economic strength, Adelaide’s affordability relative to other capital cities and the lowest vacancies in the nation.

The strong performance in the Adelaide property market over the past few years has coincided with the rise and rise of the South Australian economy.

CommSec publishes its State of the States report quarterly, providing a ranking for the eight state and territory economies based on a series of metrics. Traditionally South Australia has ranked in the bottom half of the national table but in the past two years it’s been in the top half.

In the October 2023 report, South Australia ranked No.2 in the nation and in the latest report published in January 2024, South Australia rose to No.1 for the first time.

When your local economy is so strong, real estate markets will rise.

The second factor driving Adelaide’s market is relative affordability. Adelaide’s median house price is roughly half that of Sydney, and well below the median prices in Melbourne, Canberra and Brisbane. You get more bang for your buck in the Adelaide market.

And the third big factor is incredibly low vacancy rates. Low vacancies are an issue across Australia, but nowhere more so than in Adelaide. While the national vacancy rate is around 1.1%, Adelaide’s is just 0.4%.

In postcode after postcode across Adelaide, vacancy rates are closer to zero than to 1%. This means rents are rising fast and yields are high.

All those factors combined provide a recipe for Adelaide prices, and rents, to keep on rising – and providing one of the nation’s most compelling property markets.

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