Adelaide is strongest property market but days of 'making a quick buck' are over

After years of strong growth, Adelaide’s property market is showing early signs of deceleration in both buyer demand and price momentum.

While the fundamentals of the South Australian capital remain relatively stable compared to other major cities, investors and homebuyers alike are beginning to tread more cautiously.

For the three months to January 2025, according to CoreLogic reports, Adelaide was still the strongest growth market in the country, recording a 1.8 per cent price increase, with Perth slightly behind at 1.7 per cent. For the 12-month period, Perth took first place at 17.1 per cent growth and Adelaide the second strongest market in the country at 12.7 per cent growth.

While these figures do not indicate a soft market, the data is always a few months behind the actual market and can give buyers a false lens on the market conditions.

On the ground, we are seeing a shift in buyer sentiment and demand. Open home attendance numbers are down, days on market are starting to stretch out and pricing is not as strong as previously seen.

Sellers and investors must be a little savvier to get the right property in Adelaide as the market is generally more discerning now, and 2025 will see market segments form.

Economic pressures

Throughout the pandemic and into the recovery years, Adelaide stood out for its resilience, affordability and lifestyle appeal.

Recent months, however, have revealed a slowdown in buyer urgency. Higher interest rates, cost-of-living pressures and broader economic uncertainty have begun to dampen confidence, leading to more measured activity in the market.

Buyers are taking longer to make decisions, auctions are seeing fewer competitive bidders, and properties that once flew off the market are now lingering longer, especially those that require significant upgrades or renovations.

Interestingly, not all segments of the market are experiencing this softening equally.

Properties that are fully renovated and move-in ready continue to outperform those needing work, often attracting multiple offers and stronger prices.

Well-presented homes in desirable suburbs are still generating significant interest, particularly from busy professionals and downsizers who are prioritising convenience and quality over potential and value-add opportunities.

This trend is being driven in part by the ongoing challenges within the building and trades sector. Labour shortages, material delays, and escalating construction costs have made renovation projects both costly and unpredictable.

For many buyers, the prospect of taking on a major renovation in this environment is simply too risky or unappealing.

As a result, turnkey homes that have already undergone modern updates are not only more attractive but are also seen as safer investments in an uncertain market.

Buyers more selective as prices rise

Another key factor influencing the current landscape is buyer discernment.

As Adelaide’s median house price has grown, what was once a relatively affordable market has become more competitive and expensive. This shift has encouraged a more cautious, value-focused approach among purchasers.

Buyers today are far more selective, often passing on properties that would have sparked bidding wars just 12 to 18 months ago.

Homes requiring extensive work—especially those with dated layouts, structural issues, or cosmetic shortcomings—are struggling to gain traction, even when priced to reflect the need for improvements.

For investors, the message is clear: quality presentation and minimal required maintenance are more important than ever. Properties that offer immediate liveability and require little to no upfront expenditure are attracting stronger tenant interest and better sale prospects.

For the more proactive investor willing to do a small project this can represent a great buying opportunity where quick gains emerge from some renovation work. The “fixer-uppers” offer potential upside more now than ever before.

For those with capital and reliable access to trades, there are solid opportunities to secure and improve underperforming assets. You just must plan well, know your product and don’t overcapitalise or simply overspend.

While Adelaide’s market remains fundamentally sound, the dynamics have clearly shifted.

The age of rapid, across-the-board growth is tapering, replaced by a more segmented and quality-driven market.

Renovated homes in sought-after areas will likely continue to lead the way, while properties needing substantial work may continue to underperform in the months ahead.

For investors, adaptability and a clear-eyed view of buyer sentiment will be key to navigating this next phase in the Adelaide property cycle.