Adelaide Property Investment Update 2022

Here, we break down the key aspects to understand before investing in Adelaide and what makes this city an opportunity beneficial for all investors.

Adelaide Housing Market

Adelaide’s housing market has historically been a strong performer, with both houses and units seeing a steady rise in the median prices. Being a major capital city in Australia, Adelaide is able to offer a similar lifestyle to other cities at a much more affordable price.

Although 2020 saw most housing markets hit a decline in their growth, Adelaide’s median house prices has reached record highs and that number continues to grow.

Source: Median price (unstratified) and number of transfers (capital city and rest of state)

As of June 2021, Adelaide’s housing market is at an all time high median price of $542,913 and the overall property market has seen an increase of 5.4% in the second quarter of 2021.³ This strong performance that Adealiade’s property market has experienced towards the end of 2020 and carrying into 2021 is expected to continue with forecasts predicting Adelaide’s property market to increase by 9% in 2021.⁴

While remaining one of the most consistent and reliable housing markets in Australia, Adelaide has identified itself as an appealing location for all potential investors.

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Adelaide Economy and Infrastructure

Much like the housing market, Adelaide’s city economy has been a consistent performer even in times of economic stress. Making up close to 20% of the State’s economic output and consistently growing, Adelaide is the main driving force behind South Australia’s economy.⁵

Although COVID-19 had its impact on many city economies in 2020, the state of South Australia and city of Adelaide was able to avoid any major economic downsides. With both consumer and business confidence indexes recording significant growth rates in 2020, the state is now seeing an all time high as of February 2021.⁶

A component to maintain Adelaide’s economy has been the investment in improving the city’s infrastructure and in doing so creating and supporting jobs.

Some of the key infrastructure projects include:⁷

Victoria Square/Tarntanyangga

$24 million upgrade to provide more facilities, create infrastructure for more pop-up cafes and events, and extend this event space for up to 5,000 people.
Rundle Mall

$30 million redevelopment of Rundle Mall to reaffirm the precinct as the state’s premier shopping destination.
Adelaide BioMed city

$3.6 billion development of BioMed city as one of the largest health and life science clusters in the Southern Hemisphere.

Property investor guide

If you are looking to invest in property or simply exploring the possibilities, this guide will help you navigate the steps involved to kickstart your property investment journey.

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Adelaide Rental Yields

Rental yield is one of the most important figures to understand when investing in a property. It is essentially the amount of money you make on an investment property by measuring the gap between your overall costs and the income you receive from renting out your property.

Similar to it’s housing market, Adelaide’s rental yield has historically remained steady and consistent with little fluctuation over time. As of June 2021, the average gross rental yield for houses and units in Adelaide is currently sitting at 4.2% and 5.3%, respectively.⁸ These rental yields have remained resilient over the past few years, with very little change even during the impacts of COVID.

Best Suburbs in Adelaide to Invest:

There are of course many suburbs in Adelaide that are great locations to begin or grow your investment portfolio. Through our analysis of Adelaide's property market, we have identified suburbs in the high, medium and low end that may be a great opportunity to begin your investment journey with. These 3 suburbs were chosen due to their proximity to the CBD, historical property growth and potential rental yields and may serve as a guide that we believe can provide strong results if you’re looking to invest in property.

Walkerville, 5081

Key Stats	House	Unit
Median buying price	$1,447,500	$450,500
Median rent (per week)	$575	$400
Rental Yield	2.2%	4.6%
Distance to CBD	5.2km

Source: https://www.realestate.com.au/neighbourhoods/walkerville-5081-sa

Located just outside Adelaide’s CBD, Walkerville is a suburb with prices on the higher end of the market, although has shown strong growth in recent years. With a median house price of $1,447,500 houses in Walkerville have experienced a compound growth rate of 8.8% over the last 5 years, while units have shown a stable increase of 1.2%.⁹

Although units in Walkerville are not growing at the same rate as houses, the higher rental yield they provide makes it an attractive investment option depending on your situation.

Semaphore, 5019

Key Stats	House	Unit
Median buying price	$700,000	$372,500
Median rent (per week)	$460	$315
Rental Yield	3.3%	4.3%
Distance to CBD	16.3km

Source: https://www.realestate.com.au/neighbourhoods/semaphore-5019-sa

Unlike Walkerville, Semaphore provides a more affordable option for home buyers, that is slightly further from Adelaide’s CBD. Semaphore is still able to provide a suitable rental yield for investors and has experienced a healthy compound growth rate of 5.3% for houses and 4.3% for units in the past 5 years.¹⁰

Marion, 5043

Key Stats	House	Unit
Median buying price	$557,500	$382,000
Median rent (per week)	$420	$283
Rental Yield	3.9%	3.8%
Distance to CBD	11.7km

Source: https://www.realestate.com.au/neighbourhoods/marion-5043-sa

Recently named the best area to invest in 2020-21 by Hotspotting founder Terry Ryder,¹¹ Marion is seen to be entering a significant growth period. With affordable property prices and strong rental yields, Marion has provided an ideal location for many investors and with current 5 year compound rates of 3.7% for houses and 8.0% for units, the suburb has shown strong potential for long term growth.¹²

How to invest in the Adelaide property market

If you’re ready to start investing in Adelaide, the next step in your journey is to speak with a broker to apply for an investment loan.

For your first investment property, we have created a beginners guide to outline the main factors you need to consider and the costs involved here.

When applying for an investment home loan, it is best to understand what type of loan is right for you and the associated rates. You can compare investment loans across multiple lenders from our panel here or speak to a Mortgage Choice Broker who can go through your situation, compare the loans available and find the loan that’s right for you.

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Of course, this is only a starting point, as there are many areas in Adelaide that can offer similar or greater investment opportunities. If you’re interested in investing in Adelaide and are ready to get the process started, it is best to speak with your local Mortgage Choice broker to get expert advice on your property investing journey.