Adelaide has established a reputation as one of the nation’s steadiest and most consistent markets. It presents as a safe place to own real estate – and, increasingly, as a market likely to deliver good capital growth.
It achieved consistent price growth in 2020, when some of the major city markets were faltering under the initial COVID-19 onslaught, and has achieved notable price increases in 2021.
We have yet to see the full impact on prices and rents from rising sales volumes and very low vacancy rates. Our analysis suggests Adelaide will transition from solid to spectacular growth in the near future.
The price data published by CoreLogic provided a hint of that – Adelaide’s median house price rose 2.1% in the month of September, the highest increase in the nation.
The city’s property markets are underpinned by an economy that is gradually rising up the national rankings, boosted by Adelaide’s growing reputation as the national leader in high-tech innovation and alternative energy development. It has also established an enviable reputation for control of the coronavirus, with few instances of lockdowns.
It is increasingly being targeted for its affordability (median house price $575,000, compared to $962,000 in Melbourne and $1,311,000 in Sydney) and for rental yields that are well above average for Australian capital cities.
The city also offers an enviable lifestyle, with its river, beaches, accessible hills district and renowned wine districts on the northern fringe.
The 10 best suburbs in Adelaide to invest in
- Eden Hills
- Elizabeth Vale
- Golden Grove
- Morphett Vale
- Seacombe Gardens
A standout feature of the Adelaide market is the ultra-low vacancies. Most of our Top 10 suburbs have vacancy rates below 0.5% and some have zero vacancies, with an inevitable response of sharply increasing rentals. Six of the Top 10 have median rental yields above 4%, at a time when the capital city average is 2.8%.
The other noteworthy feature is affordability. Million-dollar-median suburbs are rare in Adelaide and none make our Top 10 list. Nine of the 10 suburbs have median house prices under $750,000, including four below $500,000.
Adelaide has suburbs with growth potential and median prices in the $200,000s, something that is rare among the Australian capital cities.
Value for money is a characteristic of Adelaide. Suburbs on our Top 10 list with median prices in the $500,000s and $600,000s would be million-dollar areas in Melbourne or Sydney.
Overall the city offers an enticing package for investors – suburbs with affordable prices, very low vacancies and attractive rental yields boosted by rising rentals.
The middle-market suburb of Belair in the Mitcham LGA is a case in point. Its ultra-tight rental market is sending rents soaring and sales activity is also rising strongly, with a consequent impact on property values. A 7% rise in the median house price to $720,000 in the latest quarter suggests the rate of price growth is accelerating.
There are similar conditions in nearby Eden Hills, which has the additional appeal of greater affordability (median price $660,000). Prices have started to rise in the past 12 months and there has been a particular uplift in the latest quarter, in response to the strong increase in sales activity.
The suburbs of Mitcham attract demand in part because of the nearby Flinders medical and educational precinct. So too does the nearby City of Marion, where the suburb of Seacombe Gardens is well-situated near the Southern Expressway, Westfield Marion and the university precinct, as well as the Tonsley innovation precinct. There is virtually nothing available for tenants, rents are rising, buyer demand is increasing and prices have recently responded.
In the far south of the metropolitan area, the Onkaparinga LGA has multiple lifestyles on offer, including seaside suburbs and a noted wine district. Two suburbs in this precinct, which offer affordability, good amenities and access to the Southern Expressway, are Morphett Vale (median price $345,000) and Reynella (median price $380,000). Both have extremely tight rental markets, with rents rising strongly. Prices have responded to increased sales activity in the latest quarter.
The Port Adelaide Enfield LGA, north of the CBD, attracts high levels of demand for its range of attractive suburbs at reasonable prices. Broadview has near-zero vacancies and rising rents, with recent uplift in sales volumes resulting in the median price starting to rise, particularly in the most recent quarter, up 10% to $600,000.
There are similar conditions in neighbouring Greenacres, but homes are more affordable despite the recent uplift in the median house price to $510,000. Just a few kilometres north of the Adelaide CBD, Greenacres is centrally located for a range of services and amenities.
The northern suburbs of Adelaide include the City of Playford, which overall has the cheapest suburbs of any state or territory capital city in Australia (some with median house prices below $200,000). They include the Elizabeth suburbs, several of which have median house prices in the low $200,00s. Elizabeth Vale is slightly more expensive at $260,000, following a double-digit rise in the latest quarter. Infrastructure is strong in this precinct. There are major employment nodes nearby, vacancies are near zero and rents are rising.
Another northern precinct that’s a little more upmarket is the LGA of Tea Tree Gully, where the suburb of Golden Grove is a standout for its infrastructure and amenities, including its schools’ precinct and major green spaces. Demand from both tenants and buyers is strong, with rents and prices rising. The median house price jumped almost 10% in the latest quarter to $565,000.
At the upper end of the market, Goodwood sits just outside the CBD. Sales activity is rising and prices have responded recently, notably in the latest quarter with a 6% rise to a median of $905,000. This suburb is set to join Adelaide’s small but growing million-dollar club in the near future.
The 10 best suburbs in Adelaide to invest in
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|Suburb||Median house price||1-yr growth||10-yr average
annual growth (%pa)
Sources: Median price, growth and rental yield: CoreLogic data sourced from yourinvestmentpropertymag.com.au dated 1 August 2021. Vacancy rates: SQM Research as at September 2021.
Cover image source: Taras Vyshnya/Shutterstock.com
About Terry Ryder
Terry is the founder and Managing Director of hotspotting.com.au, which he created in 2006 to help investors find the best places to buy. Terry has been a specialist researcher and writer on Australian residential property in a career spanning four decades. During that time he has published four books.
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