Adelaide bucks the trend on falling house prices

House prices are easing across the capital cities, but one city hasn't come off the boil. Why are property investors suddenly noticing Adelaide?

Residz Team 3 min read


While house prices have eased off in Australia’ capital cities, one city is bucking the trend and is still recording robust property value growth.

Adelaide recently posted a week in which house values rose 0.26%, according to published CoreLogic data. This contrasts with falls in value of 0.36% and 0.32% respectively for Sydney and Melbourne in that same week.

Adelaide is holding firm alongside, and to a greater extent than, Brisbane and Perth. These two popular real estate markets are holding in positive territory, but only just, with values rising under 0.05% in one recent week.

Why Adelaide is being noticed

According to the Adelaide Economic Development Agency there are many reasons why business and property investors are noticing Adelaide. Aside from the relatively affordable housing:

InDaily’s Andrew Spence also pointed out in early June that Adelaide’s advertised stock levels were

“still 39.5% below the five-year average while Brisbane (-38.2%) and Perth (-34.7%) are also well down. However, Sydney’s advertised listings are 5.1% higher than 12 months ago and 1.5% above the five-year average,” he writes.

A changing property market

This could all explain the trend in rising property values for Adelaide, as well as for Brisbane and Perth, but the property market is changing. We saw the recent first interest rate rises in more than 10 years, and most recently, the Commonwealth Bank made a shock prediction of a possible drop in Australian property values of 32% - their “worst-case” scenario.

CommBank’s most probable scenario, it says, is still a fall, but a more modest one at around 11%.

It’s not good for property owners hoping to make a profit out of their property investment. CoreLogic’s latest Pain & Gain report looked at 106,000 property resales in the March 22 quarter and concluded the rate of profit-making sales was declining for the first time since mid-2020.

Head of Research Eliza Owen says the slight decline in profit-making sales pointed to another sign of a changing market for sellers. Key indicators of the changing market included:

“We are likely to see the instance of nominal gains from dwelling resales erode throughout 2022, which will have an even greater impact on buyers who have entered the market more recently,” Ms Owen said of the report.
“It may only be recent buyers who will take a loss when selling compared to those who purchased before the upswing,” she said.  

Some areas making more of a profit than others

The winners for making a profit are Hobart, where 99% of properties made a nominal gain. Hobart remained the most profitable of the capital cities for the 15th consecutive quarter.

Also, Canberra houses had the highest rate of profitability with a record high rate of 99.7% of resales making a nominal gain.

Regional Victoria home sellers were the winners among all of Australia’s regional areas, with a record high rate of 99.4% posting profitable gains. 99.9% of homes in Geelong made a nominal gain when resold but Bendigo went one better, with every single resale posting strong gains, with the median gain being $301,000.

Darwin units had the lowest incidence of profit-making sales in the quarter at 55.4% recording a nominal gain.

These are interesting times for property buyers and sellers, and no doubt there are plenty more to come.

A helpful note if you’re selling a home, buying one, or just love learning about real estate; make sure you download a free property report from Residz.  

Photo of Adelaide by Finn on Unsplash