Two decades of market trends point to today's Adelaide property hotspots

Adelaide has undergone strong real estate value growth since 2004, with prices increasing from a median dwelling value of $166,000 to $814,400​.

This remarkable escalation places it firmly in second place for all capital cities in Australia, just behind Hobart. The 20-year growth trends for Sydney and Melbourne roughly tripled in the same period, far short of Adelaide’s huge gains.

A 20-year snapshot of growth and decline

Over the past two decades, Adelaide’s property market has experienced a dynamic mix of growth and retraction, with varying performance across different years and regions.

For property investors, understanding these historical trends is crucial when it comes to making informed decisions in the current landscape.

The growth years

Adelaide’s property market has seen significant growth over the last 20 years, with the most notable periods occurring in the mid-2000s and then again from 2016 through to 2021.

These years were marked by an increasing number of buyers, both locally and from interstate, driving demand in the housing sector.

• 2000 to 2007: This period was characterised by steady growth. Although the South Australian market is not typically as volatile as other states, Adelaide saw consistent price increases due to the state’s relatively stable economy, government investment in infrastructure, and a growing population. Housing affordability in Adelaide compared to cities like Sydney and Melbourne attracted interstate investors, particularly from Victoria and New South Wales.
• 2016-2021: After a period of moderate price growth following the Global Financial Crisis (GFC), the Adelaide property market began to rise significantly again from 2016 onwards. A combination of factors, including low interest rates, strong local employment, and rising consumer confidence, fuelled demand. The investor-friendly environment, in part, spurred this growth, with property prices in metropolitan areas, particularly along the city’s coastal suburbs, showing strong upward momentum.

Suburbs such as Unley, Burnside, and Norwood experienced strong demand, and there was substantial activity in fringe areas like Seaford and Mount Barker, where new developments attracted buyers looking for more affordable options.

The downturns

However, the Adelaide market has also faced declines, particularly after periods of growth or in times of economic instability. Notable years of retraction included:

• 2008-2009 (GFC): Like much of the world, Adelaide’s property market was affected by the GFC. Prices slowed and, in some cases, saw small declines as consumer confidence dropped. The financial uncertainty led to a cautious approach by buyers and investors, resulting in fewer transactions and stagnating prices across the city.
• 2011-2015: This period was marked by slow growth and some retraction, as the Australian economy experienced a slowdown. Additionally, Adelaide’s property market was influenced by the end of the mining boom, the downturn of manufacturing in the northern suburbs from 2007 and the full closure of the Holden car manufacturing plant by 2017 saw around 10,000 jobs lost, which had previously driven regional investment and growth in these areas, from Elizabeth to Port Augusta and Whyalla. These markets saw price reductions and a slower recovery than other parts of the country.

During these years, the Adelaide property market participants became more selective, with significant declines seen in certain suburbs and regions. The western suburbs, including Woodville and Cheltenham, experienced noticeable price falls due to an oversupply of property in the market, as well as lower demand compared to the city’s more desirable inner suburbs.

• 2018-2019: Although Adelaide did not experience as significant a downturn as Sydney or Melbourne during these years, the local market was still impacted by a national property correction, exacerbated by tightening lending conditions, the banking Royal Commission, and uncertainty surrounding federal elections. During this time, Adelaide’s property values in some areas stagnated or saw moderate decreases. Suburbs like Mawson Lakes and Elizabeth experienced price reductions as buyers became more cautious, and overall market sentiment was subdued.

Suburbs with the biggest declines

When examining the suburbs most affected by price declines, there are clear patterns tied to factors such as oversupply, demographic changes and economic shifts.

• Elizabeth: A large suburban area in Adelaide’s northern region, Elizabeth has struggled with fluctuating property values over the years. The decline in manufacturing jobs and economic shifts away from industrial sectors left parts of Elizabeth with higher vacancies and less demand. Consequently, this area saw property prices drop during the early 2010s, and while it has seen some recovery, it continues to lag behind more central and coastal areas.
• Mawson Lakes: This suburb experienced rapid growth early on but was later affected by an oversupply of newer, high-density housing developments. As demand softened, particularly from investors, property values retracted. Furthermore, the suburb’s reliance on infrastructure and local amenities that did not fully meet growth expectations contributed to slower-than-expected price recovery.
• Port Augusta and Whyalla: While these regional cities initially benefited from the mining boom, the subsequent downturn in commodity prices and reduced demand for industrial workers led to declines in property values. These areas saw some of the steepest declines in the post-GFC years as investors pulled back.

The Adelaide property market over the last 20 years has demonstrated a pattern of growth and retraction driven by a variety of economic, demographic and market factors.

Investors who have capitalised on the growth phases, particularly in the mid-2000s and post-2016, have enjoyed significant returns, while those who entered during periods of decline have seen more modest results.

For investors today, understanding these historical trends is key to navigating the current market.

While Adelaide’s property market is currently stable, the areas that saw the biggest declines in the past, like Elizabeth, Mawson Lakes, and parts of the northern suburbs, continue to show lower levels of growth potential.

However, areas that remain robust, such as the inner-city and coastal suburbs, provide more attractive opportunities for long-term capital growth.

By focusing on these high-demand areas and avoiding regions with economic uncertainty, investors can position themselves for success in Adelaide’s evolving market.