Adelaide’s Property Boom: What Drove a 73% Price Surge? Insights from CoreLogic’s 5-Year Market Review

South Australia’s Housing Market: A Quiet Achiever Punching Above Its Weight

It’s been five years since COVID-19 turned the property market upside down, and if there’s one clear winner in the real estate game, South Australia is right up there. While Sydney and Melbourne saw moderate price growth, Adelaide surged ahead, with home values climbing a massive 73.1% since March 2020. Compare that to the national average of 38.4%, and it’s clear South Australia has been punching well above its weight.

So, why has SA outperformed almost every other state? And more importantly, can it keep up the momentum?

Why South Australia Boomed While Others Stalled

1. Affordability Advantage (Now Disappearing)

Pre-COVID, Adelaide was one of the cheapest capital cities in the country, making it an obvious choice for buyers priced out of Sydney and Melbourne. When interest rates hit rock bottom in 2020, that affordability made Adelaide a prime target for homebuyers and investors alike. Fast-forward to 2025, and the price tag on an Adelaide home has jumped nearly 75%—which means that once-affordable market is now feeling the squeeze.

With home prices climbing faster than wages, Adelaide has gone from “affordable alternative” to one of the least affordable cities relative to local incomes (second only to Sydney). This shift is likely to slow growth in the coming years as more buyers hit their borrowing limits.

2. Population Growth Driving Demand

For years, South Australia was known for its “brain drain”—people leaving for better opportunities interstate. COVID flipped that on its head. With lockdowns and lifestyle shifts, SA saw a net gain in interstate migration for the first time in decades. Add in record-high overseas migration when borders reopened, and the demand for housing skyrocketed. More people = more demand = higher prices. Simple equation.

This demand has also kept Adelaide’s rental market incredibly tight, pushing rents up by 46% since 2020, compared to a national rise of 38%. With vacancy rates sitting below 1%, renters are feeling the pinch, and landlords are cashing in.

3. Tight Supply (And No Quick Fix in Sight)

Unlike Melbourne, which had a steady pipeline of new housing developments, South Australia has struggled with a lack of supply. Builders faced cost blowouts, material shortages, and delays, making it tough to keep up with demand. On the resale side, fewer people are listing their homes, further restricting supply.

With strong demand and limited stock, prices have remained high. Unless SA sees a major increase in housing construction or a shift in selling trends, this supply shortage will continue to prop up property values.

4. Investors Jumping on the Bandwagon

Once Adelaide’s price growth became impossible to ignore, investors piled in, attracted by strong rental yields and capital growth prospects. Unlike Victoria, which introduced investor-unfriendly policies (higher taxes, stamp duty hikes), South Australia kept things relatively investor-friendly, drawing more interest to the market.

Investors have played a big role in pushing prices higher, but as affordability worsens, we may see a slowdown in investor demand—particularly if the market starts to plateau.

How SA Compares to the Rest of Australia

A quick comparison to other states helps explain why SA has done so well:

• Sydney: Prices rose 27.6%—decent, but Sydney was already expensive, which capped further growth. The COVID exodus (people moving to regional areas) also took the heat out of the market.

• Melbourne: Just 8.4% growth—the weakest performance of any capital city. Harsh lockdowns, interstate migration loss, and higher taxes on investors all played a role.

• Brisbane: 68.7% growth—like Adelaide, Brisbane had affordability and a flood of interstate migrants working in its favor.

• Perth: The only city to outperform Adelaide, with 75.9% growth. Perth’s market had been in a slump before COVID, giving it plenty of room to climb.

• Hobart: 27.7% growth. Hobart had already boomed pre-2020, so it didn’t have as much upside left.

The big takeaway? 

Markets that were affordable and attracted people saw the biggest price jumps. Adelaide, Brisbane, and Perth all fit this profile, while more expensive or oversupplied cities like Melbourne struggled.

Can Adelaide Keep the Momentum Going?

Looking ahead, South Australia’s property market is likely to slow down, but not crash. Several factors will influence where things go from here:

✅ Interest Rates: If the RBA starts cutting rates in late 2024 or early 2025 (as expected), that could give the market another boost. Lower rates mean better borrowing power, which tends to push prices higher.

✅ Migration Trends: As long as SA keeps attracting new residents, demand will stay strong. However, if migration slows, that could take some heat out of the market.

✅ Housing Supply: There’s no quick fix to the housing shortage. If new supply remains low, prices will hold firm. But if developers ramp up construction, we could see more balance in the market.

❌ Affordability Constraints: The biggest brake on growth is affordability. With home prices up nearly 75% and wages lagging behind, more buyers will struggle to enter the market. That naturally slows demand and puts a cap on price growth.

❌ Investor Demand: If rental yields flatten and capital growth slows, investors might start looking elsewhere, which could reduce competition for homes.

Final Thoughts

South Australia’s property market has been a standout performer, riding a wave of affordability, migration, and supply shortages to massive price growth. But after a 73% surge, the days of runaway gains may be behind us.

Going forward, expect a more balanced market—price growth will likely slow, but with tight supply and ongoing demand, Adelaide is unlikely to see a major downturn. The boom phase might be over, but SA’s property market remains one of the strongest in the country.

Key Takeaway: The market isn’t crashing, but don’t expect another 75% price jump anytime soon. Growth will continue—just at a more sustainable pace.

Source - CoreLogic 'Five years on from COVID-19: How the housing market has changed'