Adelaide unit prices reach half-million-dollar milestone, joining the ranks of Brisbane and Melbourne

Adelaide’s median unit price has crossed into the $500,000 club, joining the likes of Brisbane, Melbourne, Canberra and Hobart, as new data shows prices have risen by $60,000 in the past year.

South Australia’s capital city median unit price rose by 5 per cent in the past three months and 15 per cent in a year to a new record-high median of $511,039, the latest Domain House Price Report for the June quarter shows.

Domain’s chief of research and economics, Nicola Powell, says part of the price growth is attributed to the rising cost of houses, which has created more demand for units against a lack of supply.

“Affordability is absolutely boosting demand for units and pushing prices higher because people are just priced out of purchasing a house,” she says.

The median house price in Adelaide is just short of $1 million at $929,972.

Ray White Adelaide City real estate agent Andrew Downing says first-time home owners are being priced out of houses and are turning to apartments more than ever.

“We’re selling a lot of apartments now, like one bedroom or even two bedrooms that don’t have car parks that we struggled to move in the past five years. But in the past year, they’re moving quickly,” he says.

“[People] are starting to utilise apartments as their entry onto the property ladder.”

SOLD - $540,000

305/211 Grenfell Street, Adelaide SA 5000

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Downing says many interstate investors in the Adelaide apartment market, especially at the more affordable end of the spectrum, compete with local owner-occupiers.

“Investment activity is also supporting demand for units or apartments,” Powell says.

“When you look at the proportion of home loans to investors [in Adelaide], it’s sitting well above the decade average. At the moment, it’s almost 38 per cent, and that decade average is 29 per cent, so there are a lot more investors active in the Adelaide housing market than has been seen historically.”

In June 2024, investor lending growth outpaced the growth of owner-occupier lending nationally, according to the Australian Bureau of Statistics (ABS).

“The total value of new investor loans was 30.2 per cent higher compared to a year ago, while for owner-occupiers, it was 13.2 per cent,” says ABS head of finance statistics Mish Tan.

South Australia saw more new loan commitments for investors in May and June 2024 at $630 million, much higher than its May 2022 peak of $564 million.

Local agent Mario Bonomi of LJ Hooker St Peters says Adelaide has also grown as a popular and more affordable destination to settle down in compared to Sydney, Brisbane and Melbourne, contributing to its current property boom.

“We’re getting a lot of expats coming back to Adelaide. The rest of Australia is starting to realise that it’s a pretty cool city, and it’s got a lot to offer, and the population is growing, and so all of these things add to that stress in [the property] markets, be it housing and or units,” Bonomi says.

While there has been a boost in investors in the market, Bonomi has also seen many home buyers turning to apartments because it is now “the entry price for housing”.

Now, buying an apartment has become a natural entry point into the Adelaide real estate market, whereas before, buying houses was affordable for a first-time buyer. It’s only natural units are booming, he says.

“[The Adelaide unit market] still has some more growth ahead,” says Downing.

SOLD - $420,000

9/326 Gilles Street, Adelaide SA 5000

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