Adelaide house prices keep growing as Sydney, Melbourne decline
Despite a recent slowdown, house price growth in Adelaide continues to outpace the rest of Australia’s capital cities.
Home values in Adelaide grew 2.1 per cent in the final quarter of 2024, according to data from property analytics firm CoreLogic.
That’s compared to Melbourne and Sydney which declined 1.7 and 1.3 per cent respectively.
Adelaide also outpaced Brisbane/Gold Coast (1 per cent) and Perth (1.8 per cent) last quarter.
But CoreLogic noted that quarterly price growth in Adelaide slowed down over the course of 2024.
“Adelaide had the highest quarterly growth of the capital cities at 2.1 per cent in Q4 2024, but this was down from 3.6 per cent in Q3 2024, and a high of 4.1 per cent in the three months to May,” said Eliza Owen, CoreLogic’s head of research Australia, in a report released today.
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It caps off a year in which Adelaide’s median house price soared past Melbourne’s, with the South Australian capital’s home values increasing 13.1 per cent over 2024, according to CoreLogic. Melbourne went the other way, recording a 3 per cent decline.
Adelaide’s median house price is $814,430 as of December 31, according to CoreLogic, compared to Melbourne’s $774,093.
Adelaide’s median is roughly equal to Perth’s ($813,016) and the national median of $814,837, but still below Brisbane’s ($890,746) and Sydney’s ($1,191,955).
Median house prices across Australia’s capital cities. Source: CoreLogic
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In December, CoreLogic’s national home value index declined 0.1 per cent, primarily due to the negative growth in Sydney and Melbourne.
Signs of a downturn reflect slowing income and economic growth, while a discrepancy remains between what houses cost and what households can pay, Owen said.
“Increasingly, our housing market has reflected people not buying off income and savings alone, but relying on having a higher income, having a really high deposit and getting help from the bank of mum and dad,” Owen told AAP.
“But eventually, even that source of demand gets tapped out, something’s got to give and it looks like that give is finally occurring.”
Based on a 20 per cent deposit and 30 per cent of income spent on mortgage repayments, CoreLogic calculates that an “affordable” house price for an Australian median income household is $512,639.
That’s more than $300,000 below the Adelaide median house price of $814,430 and the national median of $814,837.
“Historically these gaps converge as housing values drop or purchasing capacity improves through higher incomes or lower interest rates,” Owen said.
“For nearly two years, this gap may have been sustained by buyers less affected by interest rates, such as those using resale profits or higher-income buyers.
“Some buyers may have been willing to accept higher housing costs in the short term, on the expectation that interest rates would fall.
“However, as lower interest rates have not materialised, housing demand from these buyers may also be waning.”
– with AAP
