Spring surprise: Adelaide house prices drop for the first time since 2020

Adelaide’s property market has just recorded its first monthly fall in over two years. But it’s a very different story in the regions.

Househunters priced out of the property market in Adelaide can breathe a sigh of relief as house prices have dropped for the first time since February 2020.

The latest PropTrack Home Price Index, out today, shows that dwelling (house and unit combined) values have declined by 0.12 per cent, with rising interest rates continuing to affect the property market.

According to the data, house prices last fell in February 2020 by 0.09 per cent. The current fall was the biggest since June 2019 when prices fell by 0.14 per cent.

The median dwelling value in Adelaide now sat at $641,000, the home price index reported.

According to the report, all capital cities were now below their price peaks, and this was Adelaide’s first monthly price fall this year.

PropTrack senior economist and report author Paul Ryan said despite the fact that Adelaide was the last capital city to record a price fall this year, it was the strongest performing capital over the last year, having recorded 18.58 per cent annual price growth since last year.

“All capital cities were now below their price peaks but this was Adelaide’s largest decline in prices since mid-2019,” Mr Ryan said.

“Even though prices are very slightly down, buyers will find solace in the fact that prices aren’t rising as quicker than they can save a deposit.”

Mr Ryan said the “big overwhelming weight of high interest rates” was continuing to affect even those markets that had previously benefited from preference shifts towards “affordable locations” since the pandemic.

“While we think those factors are going to be relevant going forward, prices in Adelaide aren’t going to fall just to the same extent as Sydney and Melbourne. Adelaide is still going to receive the benefits of those preference shifts,” he said.

PropTrack senior economist Paul Ryan said Adelaide was the strongest performing capital city over the last year.

Nationally, house prices were still significantly above their pre-pandemic levels. Across the country, home prices were down 0.39 per cent in August, and were now 2.7 per cent below their peak.

According to the report, regional South Australia was the only market that had continued to record significant growth. It had hit new price peak in August with annual growth of 19.42 per cent.

Property expert and head of buyer’s agency InvestorKit, Arjun Paliwal, said regional areas would continue to boom and would see stronger capital growth in the coming years.

“While capital cities like Sydney and Melbourne will continue to decline due to being more sensitive to finance and monetary changes such as the interest rate hikes, many of Australia’s regional areas including Greater Adelaide will continue to see strong performance given how undersupplied they are,” Mr Paliwal said.

Originally published as Spring surprise: Adelaide house prices drop for the first time since 2020