Adelaide’s unit market surges ahead of houses in price growth
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Photo by Ryan Vand
In a notable shift within Adelaide’s real estate market, unit prices are rising at a faster rate than houses, driven by changing consumer preferences and market dynamics. According to the latest data from PropTrack, unit values in Adelaide have surged by 9.87 per cent over the past year, equating to an increase of $57,200. In comparison, house prices have grown by 8.79 per cent, or $74,000, over the same period.
This growth brings the median unit price to $642,000, while the median house price stands at $925,000. Although there remains a significant gap between the two, experts suggest that this divide is gradually narrowing, reflecting a shift in buyer behaviour and market trends.
Ray White Adelaide City director Andrew Downing attributes the accelerated demand for units to several factors. “Probably because they’re coming from a low base and whereas before there were a lot of apartments being used for the investment side, there are a lot of people looking at downsizing now,” Downing explained. He noted that traditionally, unit prices have remained relatively stagnant over the decades, but recent years have seen a shift in this trend.
Downing highlighted a transformation in the perception and use of apartment blocks, which were predominantly occupied by students a decade ago. Today, the landscape has changed, with more quality and luxury offerings available. “Adelaide has become a destination place, people want to come over here for the first time, that underpins prices,” he said. This shift is partly driven by interstate buyers who find themselves priced out of Melbourne and Sydney markets, coupled with a scarcity of available land for new developments.
Affordability remains a key driver in the rising popularity of units, according to Downing. Entry-level homes, particularly one-bedroom apartments, have become more attractive to buyers despite historically being challenging to sell. The affordability factor, combined with lifestyle considerations, is reshaping the market dynamics.
Emma Slape, chief executive of Turner Real Estate, echoed these sentiments, observing a growing preference for units over houses. She noted that units provide a more accessible entry point for first-home buyers and even small families. “Years ago we wouldn’t have seen as many first-home buyers or even people having a life change,” Slape said. The appeal of being closer to the city, accessing better schools, and saving on transport costs are significant factors influencing this shift.
Slape also pointed out that newer apartment complexes with a stronger community focus and increased flexibility, such as allowing pets, are making units more desirable than ever before. She anticipates that as house values continue to climb, the demand for and price of units and apartments will also rise. “As we close the gap, we’ll probably see prices in the unit market rise at the same pace as house prices,” she predicted.
The evolving landscape of Adelaide’s real estate market reflects broader trends in urban living and affordability. With buyers increasingly prioritising lifestyle and convenience, units are emerging as a compelling option, reshaping the city’s property market dynamics. As the gap between house and unit prices narrows, industry experts anticipate that this trend will continue, further solidifying the appeal of units in Adelaide’s real estate sector.