Adelaide's property market is gaining traction.
The city's relative affordability, a strong economy and employment opportunities, availability of property and a laidback lifestyle, have all contributed to increased migration and investor interest — and rising prices.
Earlier this year, home values in South Australia's capital city have cracked the $1 million mark, joining the ranks of Sydney, Melbourne, Brisbane, and Canberra. That's a 12.1% year-over-year increase, according to a report by Domain. And SQM Research forecasted that Adelaide will continue to grow another 8% to 13% in 2025.
"Buyers in Adelaide have increased a lot recently," Brenden Lowbridge, director and mortgage broker at Money Links, told Australian Broker.
Market dynamics are contributing to the growth, including lower interest rates, which has spurred momentum in the market. There's also developing hotspots in Greater Adelaide, including Goolwa, Mile End and Stirling, that have added to the growth. Migration also plays a part. Between 2023 and 2024, Greater Adelaide's population grew 1.5%, according to the Australian Bureau of Statistics.
Lowbridge attributed much of the growing interest in Adelaide to Australia's overall increasingly expensive cost of living, which has caused many to flee Eastern capital cities in search of more affordable homes.
"The growth in Adelaide has to do with the place we're in economically, as a country," he said. "Wherever there's affordability there's demand. And there's going to continue to be demand."
But the surge has wide-spread implications, not just for buyers, but for the nation's larger property markets, which presents both challenges and opportunities for brokers.
To start, rising prices in Adelaide don't do much to solve the nation's housing shortage and lack of affordable housing options. While homes in Brisbane, Melbourne and Sydney have long passed the million-dollar threshold (in the case of the latter, Domain's data listed the median Sydney house price at nearly $1.7 million, as of March), Adelaide was once considered a bit of a safe haven for property shoppers who can't afford the coastal cities.
"Adelaide has historically been a little bit cheaper than your Sydneys and your Melbournes," said Bechara Boutros. The Adelaide-based broker at Loan Market Vantage added that not everyone is willing to uproot their lives and move across the country in search of more affordable housing.
Still, there are enough people willing to do it. And whether that be in the form of owner-occupied property owners or investors, it's enough to push up prices. The price growth means Adelaide's budget market suddenly isn't so budget friendly.
No doubt, everyone, including upgraders and downsizers, will be impacted by price hikes, just some more than others.
"House prices increasing is going to impact the first-time buyers [the most], potentially the people that are trying to get into the market, because now the barrier to entry is higher," Boutros said. "Higher prices are going to pose a challenge for anyone who's at their absolute maximum in regards to serviceability and what they can and can't afford, or they're limited with deposits. They're going to feel the pinch. Because if you're maxed out at your borrowing capacity, or you don't have the means to increase your price, this just makes the idea of home ownership slightly less ascertainable. It's gonna make it really difficult for them to get into the market."
Robert Sordillo, founder and managing director at Adelaide-based brokerage Significant Financial Solutions, added that rising prices are motivating people to move quickly, which also increases prices and competition in the market.
"People are saying, 'we need to get it in before we can't,'" said Sordillo, who added that there's been a noticeable increase in interest in Adelaide's market in the last 12 months.
"Growth will continue," he said. "There's more people coming to Adelaide. And now that affordability is starting to move because of the interest rates, we're starting to see a lot more of that activity."
Sordillo added that housing incentives in South Australia are also creating demand.
"The grants essentially let a first-time buyer save anywhere between $40,000 to $70,000 depending on the value [of the home], because they get the first-time buyers' grant, and don't have to pay stamp duty or mortgage insurance. So it's a really good incentive," he said.
Investors, many of whom were attracted to the potential for increased capital growth and higher returns, have also taken a renewed interest in the market, which could further drive up growth.
"Most of the people investing in Adelaide are equity rich," Boutros said. "They have a low debt that they've been paying off for a period of time, and their property has gone up in value. So they're putting themselves in a position to now [capitalize] on it."
Boutros said it's important for brokers to stay up to date on policy changes and educate borrowers as much as possible.
"In speaking to people, as a broker, I'm educating them on what banks look for, what bank policies are looking for, and how they get assessed," he said. "Because how you perceive your financial position is often quite different to how a bank perceives it. So just helping borrowers understand where they're at now is what we do."
