SA’s housing market outperforms Victoria

Homebuyers need $16,000 more to buy a median-priced home in Adelaide than in Melbourne, a new report shows.

PropTrack’s January Home Price Index has revealed Adelaide’s median home price currently sits at $795,000, some $16,000 more than Melbourne at $779,000.

It comes after Adelaide’s median price declined by 0.07 per cent over the past month, compared with Melbourne’s price drop of 0.3 per cent for the same period.

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The 12-month growth paints an even more dramatic picture of how Adelaide homes fared in the longer term, with our median sale price increasing by 12.41 per cent over the past 12 month, while Melbourne’s dropped 3.39 per cent.

As a result, Adelaide homes now sit at just 0.27 per cent behind their peak, while Melbourne’s homes are down 6.12 per cent from its highest recorded median.

Adelaide’s suburbs are still performing strongly, albeit in a slightly softer market than we’ve seen in recent years. Picture: Brenton Edwards

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The data shows that of Australian cities, Adelaide property prices are up a whopping, and nation-leading, 80.2 per cent since the start of the pandemic, March 2020, while Melbourne home prices are now sitting at just 13.2 per cent what they were then.

On every measure SA outperformed the national capital city average – with values down 0.16 per cent for the month, up just 3.56 per cent for the 12 months, currently sitting 0.66 per cent below their peak and having increased by 39.9 per cent on average, since the start of the pandemic.

REA Group senior economist and report author Eleanor Creagh said home prices fell nationally in January, as the softer end to 2024 carried over into the new year.

“This softening in growth has occurred alongside a surge in stock for sale, giving buyers more choice and reducing the urgency to transact,” she said.

REA Group senior economist Eleanor Creagh

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“Affordability challenges, weaker economic conditions and the sustained higher interest rate environment have also been contributors to slowing – and reversing – growth.”

According to the report, Adelaide’s median house price is $851,000, down 0.09 per cent over the past three months and up 12.43 per cent over the past year.

Adelaide’s median unit prices also performed strongly, with values up 0.09 per cent over the past month and 12.23 per cent for the year.

Adelaide’s unit price currently sits at $594,000.

Harris Real Estate managing director Phil Harris, who yesterday released his annual Harris Report, said multiple competing factors would shape the year ahead.

“The start of the year may see continued pressure on buyer demand, potentially leading to a slight decline in home values early in the year – with affordability stretched and borrowing power limited, buyers face significant barriers,” he said.

“However, several factors could shift this dynamic – any interest rate cut or targeted stimulus could spark demand and drive price growth.

Phil Harris from Harris Real Estate (Image: AAP/ MarkBrake)

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“It may take one or two rate cuts to motivate buyers, potentially creating a split year – with a weaker first half and a stronger second.

“Alternatively, easing the mortgage serviceability buffer could boost borrowing power, speeding market access and reducing debt costs.”

Regional SA also shone on the national stage, up 0.6 per cent for the month, 12.94 per cent for the year (second only to regional WA’s 13.38 per cent) and up 84 per cent since the start of the pandemic – compared with an average of growth of 59.5 per cent nationally – to a $471,000 median.

Regional SA’s median house price currently sits at $482,000 – up 0.62 per cent over the previous month and 13.26 over the past year.

Looking at Adelaide’s regions, Barossa-Yorke-Mid North experienced the greatest growth over the past year, with dwellings up 16.26 per cent to $481,000.