The Adelaide housing market continues to demonstrate solid momentum in early 2025, with both property prices and rental yields continuing to trend upward. According to the latest CoreLogic Home Value Index (May 2025), Adelaide has recorded one of the strongest performances of any Australian capital city. While many other markets are grappling with affordability constraints and economic uncertainty, South Australia appears to be weathering the storm better than most.
So what’s driving this strength? And how long can it last?
Nationally, property values have been edging higher for three consecutive months, although the pace of growth has moderated. Across Australia, dwelling values increased by 0.3% in April and Adelaide tracked at the same rate for the month, but a little behind on a quarterly basis (0.9% vs the national 1.1%). However, Adelaide remains a standout performer on an annual basis with a 9.8% increase in the past year—only Perth (10%) and some regional markets have seen stronger results.
Adelaide’s housing market hasn’t just held steady—it has reached a new record high, with the median dwelling price now sitting at $825,776, according to CoreLogic. Similarly, Perth and Brisbane are also at peak values. This stands in contrast to Sydney and Melbourne, which remain below their previous price peaks. Over a 10-year period, Adelaide is the darling nationally recording a 93.6% value increase – the highest of all Australian cities.
Adelaide still offers much more accessible price points for houses than Sydney or Melbourne. Adelaide’s lower entry point makes it appealing to first-home buyers, upgraders, and investors alike. The city’s value proposition is particularly compelling when combined with solid gross rental yields (around 3.7%).
South Australia is experiencing similar housing supply challenges seen nationally. New dwelling starts are trending below the long-term average – falling 4.4% in the final quarter on 2024, and builders continue to face cost pressures and delays. Fewer homes entering the market keeps inventory tight, putting upward pressure on prices and rents.
Adelaide benefits from a relatively diversified local economy, supported by sectors like healthcare, defence, and education. Stable employment conditions help support buyer confidence, even when national economic sentiment is wavering.
CoreLogic’s breakdown of Adelaide’s local government areas reveals double-digit annual price growth across many regions. Northern and southern suburbs have seen especially strong demand, reflecting both population growth and development activity.
While Adelaide grabs headlines, regional South Australia is also surging ahead. Values in regional SA jumped 1.5% in April alone—outpacing Adelaide—and recorded an annual increase of 12.9%, according to CoreLogic. Towns and districts across the Murray Mallee, Eyre and Yorke Peninsulas are seeing above average growth.
Rental conditions in Adelaide have tightened further. CoreLogic reports annual unit rent growth of 8.5%, and housing of 4.8%.
Despite all the positive indicators, affordability is becoming a concern—both in South Australia and nationwide. According to CoreLogic’s analysis: households now spend over 50% of gross income on mortgage repayments if purchasing the median-priced home with a 20% deposit. It would take the average household more than 10 years to save a 20% deposit. Renters now dedicate nearly 33% of their income to housing, a new record.
Interest rates remain a wildcard. The Reserve Bank’s rate cut in February spurred renewed activity, but with inflation risks still present, the future path of monetary policy is uncertain. Further cuts could lift confidence, but lending standards remain tight.
A key structural issue is the lack of new housing supply. CoreLogic’s report notes that new dwelling commencements fell significantly below the decade average at the end of 2024 and have not yet recovered. Rising construction costs and builder collapses have added further pressure to delivery timelines.
The months ahead will be shaped by a complex mix of political and economic factors. With the re-election of the Labor government at the weekend, housing affordability remains a central policy priority. Labor has committed to building 100,000 new homes exclusively for first-home buyers, investing $10 billion to facilitate this initiative. Additionally, the government plans to allow eligible first-home buyers to enter the market with just a 5% deposit, without the need to pay Lenders Mortgage Insurance. For the average first home buyer, this cuts the time to save for a deposit and saves tens of thousands of dollars on Lenders Mortgage Insurance.
These measures aim to enhance housing accessibility for first-time buyers. However, without concurrent supply-side reforms, such as streamlining construction approvals and increasing housing supply, there is a risk that demand-side incentives could further drive up property prices. The government’s focus on cost-of-living issues, including housing affordability, suggests a balanced approach, but the effectiveness of these policies will depend on their implementation and the broader economic context.
Looking ahead, we expect a continuation of price growth across the country, albeit at a slower pace than seen earlier in the recovery. In South Australia, the fundamentals remain supportive of modest ongoing growth in both values and rents, and we remain resolute in our opinion that over the long term, Adelaide is a solid investment, providing good returns, a relatively lower entry point and a lifestyle advantage for buyers.
Adelaide and South Australia remain stable, reliable performers in the 2025 property market. While some capital cities struggle with market volatility or stagnation, SA is showing what consistent fundamentals, restrained supply, and broad-based demand can deliver.
The key for buyers and investors is to stay informed, weigh affordability challenges carefully, and keep an eye on policy developments that could influence the next market phase. Whether you’re looking to enter the market, upgrade, or invest, South Australia currently offers a compelling mix of growth potential and rental return—if you know where to look.
