Key takeaways
Adelaide recorded a strong 1.9% rise in home values in November, its highest monthly growth rate since January 2022, placing it among the nation's leading capitals.
Growth is heavily skewed toward the lower quartile (most affordable homes), which rose 5.1% over three months, reflecting rising serviceability barriers pushing demand away from premium properties.
Low advertised supply remains the core driver of value appreciation, with stock levels still tracking 26% below the five-year average.
The pace of growth in Adelaide home values has accelerated over recent months, with November’s 1.9% rise marking the strongest monthly growth conditions since January 2022, a period when interest rates were virtually zero. Adelaide is a key contributor to the “two-speed” housing market, where the mid-sized capitals are significantly outpacing the two largest cities, Sydney and Melbourne.
Growth Trends and Affordability Skew
Note: Adelaide’s growth is heavily skewed towards the most affordable price points of the market, reflecting the pressure of rising serviceability barriers that are deflecting demand away from higher-priced homes.
| Market Segment (by Value) | 3-Month Value Change | Annual Value Change |
|---|---|---|
| Lower Quartile (Affordable) | 5.1% | 14.1% |
| Upper Quartile (Premium) | 3.8% | 10.3% |
Source: Cotality, December 2025
Supply Shortage and National Headwinds
Low advertised supply levels are the core factor keeping upward pressure on values. While supply is tight, Adelaide’s market still faces significant pressure from national economic headwinds related to affordability and debt service:
- Also read:Melbourne housing market update | December 2025
- Also read:Australian housing market update | December 2025
- Also read:Latest Property Price Forecasts Revealed. Australian Property Market Outlook 2026: Where To For Prices With Further Rate Cuts Unlikely.
- Also read:Melbourne property market forecast for 2026 | Is it a good time to invest in Melbourne?
- Also read:Sydney property market forecast for 2026. Is it a good time to invest in Sydney?
| Economic Factor | Status (November 2025) |
|---|---|
| Advertised Stock (vs. 5-Year Average) | 26% down |
| Advertised Stock (vs. Last Year) | 9% lower |
| National % Income for Mortgage Service | 45% (Near Record High) |
Source: Cotality, December 2025
Outlook and Risks
Note: Persistently low supply, government stimulus measures, and surging investment credit growth continue to outweigh downside risks for now.
However, the outlook for 2026 suggests a slowdown, as affordability and serviceability constraints impose a natural ceiling on how high prices can go.
- Serviceability Barriers: Stable interest rates are expected to exacerbate the serviceability challenge, with increases to borrowing capacity having already been eroded by higher housing prices. Rising serviceability barriers are likely to limit the magnitude of home value growth.
- Regulatory Measures: The introduction of a 20% limit on high Debt-to-Income (DTI) ratio lending signals that the regulator (APRA) is on alert for rising household debt levels. More aggressive policy adjustments, particularly targeting investors (who comprise 41% of national home lending), remain a downside risk.
Overall, while Adelaide is expected to see continued value growth, the pace of gains will likely moderate as the economic headwinds fully take effect.
