Adelaide’s property market is projected for significant growth as supply and demand pressures intensify. With a current vacancy rate of just 0.8%, well below the balanced market range of 2-3%, both rental and property prices are expected to rise sharply over the coming year.
With rental yields remaining attractive due to continued low vacancy rates, investors are likely to face increased competition for properties, pushing demand even higher. Additionally, affordability pressures in other major cities may drive an influx of interstate buyers seeking better value, further fuelling Adelaide’s demand.
Performance Property Director David McMillan said,
“With such a low vacancy rate and ongoing population growth, Adelaide is experiencing significant supply constraints. If current building activity remains at these levels, rental prices are likely to stay elevated, which in turn, keep property prices high.”
Recent data highlights the growing demand, with Adelaide expected to welcome 22,000 new residents in 2025, equating to approximately 9,000 new households. However, forecasts indicate that only 9,700 new dwellings commenced in 2024, which will be insufficient to ease the escalating supply and demand issues. David highlights, if these projections hold, the vacancy rate is expected to remain below 1%, sustaining high rental prices and further driving up house prices.
“Without intervention or policy changes to encourage new housing development, we expect these tight market conditions to persist until at least 2026, potentially driving Adelaide’s median house price past $900,000 as cash rates fall.”
“Our extended forecasts suggest that unless significant changes occur, Adelaide’s vacancy rate will struggle to exceed 1.25% by 2026, prolonging these market conditions” said David.
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