Adelaide hotspots still offering growth as Sydney and Melbourne slow

When property analysts talk about the Australian property market they tend to focus on the capital cities along the east coast and in particular the Sydney market, believing its performance reflects how the rest of Australia is performing.

It’s not.

Australia’s property markets differ greatly, even those of its capital cities.

The major data houses released figures at the start of May, which showed a slight dip in Sydney and Melbourne’s median dwelling values during April (PropTrack has them down 0.5 per cent and 0.3 per cent respectively).

That prompted dozens of media stories forecasting major property price drops and the start of the decline throughout “Australia’s property market” as if it is one big homogenous beast.

Unfortunately, once the doomsday messages are out, its hard to rein it back in and those who are not across all the data, start to believe the whole Australian property market is in peril and owners should brace for massive price drops.

What is happening is that the pace of growth is starting to slow in some markets and that’s to be expected after years of substantial growth and ongoing cost of living pressures.

It’s also important to remember that a market trend does not come from one month’s worth of data, at the very least would-be investors should be looking at quarterly results and give more weight to annual results.

Property opportunity still abounds

While some commentators will have you think otherwise, there are still plenty of markets throughout Australia that are poised for continuing price growth throughout 2026.

It does, however, remain as important as ever to be selective about where and what type of property is invested in.

Adelaide is a good example. Just a few years ago the majority of its markets were extremely affordable but after five solid years of price growth the momentum is not as broad-based.

Some of the areas that led the previous price growth cycle have now moved to a point where the forward-looking returns are less compelling.

Prices have stretched, buyer competition has intensified in pockets and the locations offering genuine future growth have narrowed. But Adelaide still has plentiful market segments with good opportunities, and the fundamentals underpinning the city remain sound.

Population growth is continuing, rental vacancy rates across the metropolitan area is among the tightest in the country and the employment base is being reshaped by defence, advanced manufacturing and infrastructure investment that is structural rather than cyclical.

South Australia’s AUKUS-linked shipbuilding pipeline, the northern defence precincts and a series of major hospital, transport and education projects are all adding to the city’s long-term demand story in ways that will keep certain corridors active regardless of where the broader cycle sits.

A market such as West Torrens presents good opportunities for investors. The airport corridor unit market is producing the strongest sub-market data in metropolitan Adelaide right now: yields above 4.2 per cent, 21 per cent year-on-year growth in the apartment segment and vacancy under 1 per cent.

Tea Tree Gully is also worthwhile, with tight vacancy rates, workable price points and the $314 million Modbury Hospital redevelopment now under construction.

Other Adelaide LGAs with potential for future price growth include Salisbury, Port Adelaide Enfield and Gawler.