High house prices in Australia are primarily driven by supply and demand imbalances, tax policies, low-interest rates, and rising household debt.
Adelaide property market forecast 2023
NAB's latest Adelaide house price forecast has values falling by a modest -1.5 per cent, a significant softening from previous expectations.
Adelaide and regional South Australia have been the strongest and most consistent performers throughout the unpredictable 2022. Since November 2021, Adelaide dwelling values have risen 13.4%, while rental values saw a rise of 12.8%.
Adelaide's property prices are forecast to fall 17% in 2023, after rising 4% in 2022. In 2023 the expected median house price is $539,542 and median unit price is $472,100.
As there are not enough homes to keep up with the population and household growth in Australia, it is both a good time to buy and sell. There have been one million new households formed between the 2016 and 2021 Census and there is not sufficient new housing to accommodate these households.
However, as the RBA potentially cuts interest rates before the end of 2023, demand pressures will contribute to a favourable environment for property prices. Consequently, prices are expected to rise by 10 per cent through 2024 and into early 2025.
So, even though QBE predicts that house prices in Adelaide will fall by 8% in 2023, the median house price in Adelaide is expected to recede by only 6% over the next three years, reaching $676,000 by June 2025.
Adelaide and Perth expected to be Australia's best performing capital city markets. AMP Chief Economist Shane Oliver expects property prices to fall to around 15-20% of their peak value by the September 2023 quarter. If cash rates are increased to over 4%, this decline could be as steep as 30%.
au's analysis showed that, even if prices rose at a similar rate to inflation over the next five years, the median house price would still be near $1.5m in 2027.
Unley Park has a median house price of $2,034,300, with SQM data showing house prices as high as $2.1 million in December. The suburb is also known for having Adelaide's wealthiest street.
Summary: The pros of living in Adelaide, Australia include its temperate climate, its affordability, its vibrant cultural scene, and its proximity to the beach. The cons of living in Adelaide include its limited public transport options, its relatively small size, and its distance from other major cities.
The outlook for 2022
For the 2022 Adelaide real estate market, it is still looking like a strong start to the year. This is supported by Ouwens Casserly's most recent auction results continuing to show high clearance rates and active bidding at record levels with high competition.
Adelaide house price growth over the last 10 years
That means that as of April 2023, the average house price in Adelaide has risen by $308,346 over 10 years. Or in other words, Adelaide's property values over 10 years have risen 40.49%.
Perth and Adelaide remain the most competitive capital cities for potential tenants, with a vacancy rate of 0.3%.
House prices are expected to soften further in 2023 but falls may not be as severe as some expect if the RBA stops increasing rates before the cash rate reaches 4%.
Zillow predicts that home values will increase by 3.5% in 2023, 3.4% in 2024, 3.3% in 2025, and 3.2% in 2026.
Westpac has revised its house price forecasts, with dwelling values expected to stabilise in 2023 (initially forecast a -7% decline). National dwelling values are predicted to rise 5% in 2024, up from 2%.
Queensland property prices tumbled after boom but now every region is rising again. The real estate rollercoaster on the Sunshine and Gold coasts is on the way up again, with house prices rising by the equivalent of $1,000 a week over the past three months, according to research.
“Prices now expected to lift 5 per cent in 2024, revised up from 2 per cent.” Overall, Westpac has predicted house prices will soar by 5 per cent in both Sydney and Melbourne, prices will jump by 6 per cent in Brisbane and rise by 8 per cent in Perth in 2024.
CoreLogic data suggests that Adelaide house prices could reach $1 million in 2030, and $700,000 for units if the annual compound growth rate of 5.2% is maintained.
Regional areas will also see much more expensive housing as families move away from the packed cities. Estimates suggest the average Sydney home will be close to $1.8 million, up from $1.6 million. Apartments will also break the price ceiling up from an average of $780,000 to an inconsolable $1.26 million.