Adelaide’s real estate market is known for its steady performance, a contrast to other major cities such as Sydney, which falter or soar at different times.
According to SQM research figures, Adelaide units and dwellings have achieved a respectable combined growth of 9.9% over the last 12 months.
Adelaide’s weekly property prices
Hotspotting founder, Terry Ryder, exclusively told The Property Tribune that Adelaide’s property market could be considered the “Mister Consistent” of the capital city markets.
“Throughout 2022, when some of the bigger cities slumped, Adelaide kept on delivering a consistent performance.”
Terry Ryder, Hotspotting
“That’s been true in 2023, although it has not been as vibrant as Sydney, Melbourne, and Brisbane, which, as 2023 went on, became stronger and stronger with more buyer activity.”
Your Property Your Wealth founder, Daniel Walsh, said one of the main contributors to Adelaide’s recent growth has been its shortage of new stock.
“We’re seeing it’s down around 32% compared to the previous five years, on average,” he said.
“Adelaide has continued to push on in price growth, even as interest rates were rising.”
Walsh also agreed with Ryder’s assessment of Adelaide’s steadiness.
“It’s not going to be a market with real highs and real lows, it’s going to be a market that climbs at a steady rate in 2024, compared to 2022 and 2023. That’s due to rate rises coming into effect.”
The Property Tribune reached out to experts for their forecasts for Adelaide’s 2024 housing market including Walsh; Ryder; PropTrack director of economic research, Cameron Kusher; and Juwai IQI co-founder and group manager, Daniel Ho
PropTrack director of economic research, Cameron Kusher, said Adelaide’s home price increase of 9.2% in 2023 was the second highest among capital cities, behind Perth.
Kusher added that in 2024 it is expected for prices to continue to rise, but at a slower pace as the impact of interest rate increases continues to be felt and as the broader economy slows.
“These factors will be offset by expectations of strong demand, relative affordability of the city, and the lack of new housing construction,” he said.
“We expect prices to rise in Adelaide by between four per cent and seven per cent next year.”
Walsh proposed a forecast in line with Kusher’s, largely dependent on whether interest rates will rise, fall or stay the same.
“If interest rates dropped in the back half of 2024, then what we’ll growth at three to five per cent.”
Daniel Walsh, Your Property Your Wealth
Ryder predicted a larger number for growth.
“A lot of forecasters are really conservative with their growth predictions,” he said.
“I don’t expect 2024 to be a boom year but I expect to be a good, steady year.
“There’s a lot of momentum in the markets as we head towards 2024, and we have an imbalance toward supply and demand; we have rising demand at a time when supply is really low.
“There’s no end in sight to this imbalance, so I expect prices to rise by more than five per cent.”
Ryder also said the potential for rental growth in Adelaide is greater than in most parts of Australia.
Adelaide’s vacancy rate is sitting at a dismal 0.5%, making it the second lowest vacancy rate in the country just above Perth.
“An undersupply is going to happen for renters for quite some time,” said Walsh.
“Across the country we’re going to have issues in the rental market, and it’s just driven by high interest rates.”
Per SQM research figures, Adelaide’s weekly rent is sitting at approximately $612 across all types of dwellings, signifying an annual rise of 12.7%.
Adelaide asking rents
Juwai IQI co-founder and group managing director, Daniel Ho, echoed sentiments that Adelaide is not the hottest market in Australia.
“You might call it the ‘just-right’ market,” he said.
Ho said Adelaide is Australia’s fifth most popular destination for Chinese buyers in most years, and in 2023, Chinese buyers will generally be purchasing homes to live in.
He cited Adelaide’s affordability as a major attraction, saying it’s a level unimaginable in any other major capital city.
Ho added that Adelaide’s housing shortage is a non-issue due to its slower population growth.
Adelaide total property listings
“The population of Adelaide is only growing by less than one per cent per year,” he said.
“Developers can easily keep up with that by constructing new housing.”
Ryder said the areas that are a part of Adelaide’s northern suburbs are attracting the largest volume of buyer demand.
“Salisbury and Playford are getting above average growth and buyer demand,” he said.
Walsh said he believed there would also be opportunities for growth in the Modbury area.
“If you are looking to invest in Adelaide, you’d be chasing those properties with larger blocks, due to scarcity,” he said.
“The price bracket of 550 to 700,000 is where the price pressure will be.”
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