Adelaide Housing View to 2030, the Great Divide.

Written By Nick and Emma .

"Note: I am not an economist or a financial advisor. This essay is an opinion piece based on my interpretation of current ABS and industry data."

Context: The Two-Speed Reality (Late 2025) Despite Australia executing a macroeconomic "soft landing" (Inflation 3.2%, GDP 1.8%), the housing market has decoupled from the broader sluggish economy. While the eastern seaboards major housing markets recover slowly, Adelaide has emerged as the national outlier. Driven by a stable cash rate of 3.60% and critical inventory failure (vacancy rates <0.8%), Adelaide is currently recording ~6.2% annual growth with a median price approaching $880,000.

This analysis, supported by data from the IMF, RBA, and CoreLogic, forecasts the market trajectory over three distinct horizons.

Economy
If you look at the headline economic data for November 2025, Australia appears to be executing a "soft landing." Inflation has moderated to 3.2%, unemployment is a manageable 4.4%, and GDP growth is hovering around 1.8%. But if you look closer, a disconnect emerges. We are living in a "two-speed" reality: a sluggish, per-capita recession for the broader economy, and a fierce, supply-constrained bull run for housing, this leaves the average Joe feeling pinched, facing declining opportunities and progressively more expensive asset prices driven by inflation and supply issues.

Nowhere is this disconnect more violent than in Adelaide. Once the sleepy "slow mover" of Australian capital cities, Adelaide has become the nation’s property leader—a market where infrastructure ambition is about to collide head-on with residential reality.

Based on primary data from the ABS, CoreLogic, and state infrastructure reports, here is an independent analysis of where we are, and exactly where we are going over the next 1, 3, and 5 years.

The Current State (Late 2025): The "Rate Cut" Rebound

As of late 2025, the Australian housing market is no longer fighting the RBA; it is being fueled by it.

Unlike the "peak rate" fear of 2023–2024, the RBA has now held the cash rate at 3.60% for several months following cuts earlier this year. This easing cycle has unlocked borrowing capacity just as inventory hits critical lows, further exacerbated by the new increased FHB scheme which provides further borrowing capacity to entrants in the middle to lower end of the market.

Adelaide is the outlier. While Melbourne prices are only slowly recovering (+1% to +2%) and Sydney grinds forward, Adelaide is recording annual growth of ~6.2%, with the median house price now sitting solidly between $855,000 and $880,000.

The driver here is not just cheaper money or income growth—it is a critical inventory failure. With a vacancy rate of just 0.5%–0.8% (effectively zero) and stock levels 36% below the five-year average, buyers are fighting over scraps. But I firmly believe this is just the calm before the storm.

1-Year Forecast (2026): Labor Shortages

The next 12 months in South Australia’s property market will be defined by a single, largely overlooked economic event: The Labor Collision.

In early 2025, major works officially commenced on the $15.4 billion Torrens to Darlington (T2D) project. By late 2025, the first Tunnel Boring Machines (TBMs) are scheduled to arrive. This is an critical infrastructure project of a scale Adelaide has never seen, and it requires an army of concreters, electricians, heavy machinery operators, and project managers.

The problem for SA’s property market: The residential construction sector draws from this same pool of talent.

• The Data: Master Builders SA and Infrastructure Australia have forecasted severe labor shortages for the civil sector with up to 50% of SA’s tradies to be re-directed to infrastructure projects.

• The Consequence: We are about to see a "cannibalisation" of the residential workforce. Many tradies will migrate to the secure, high-paying, union-backed government infrastructure jobs, leaving residential builders unable to complete homes or take on new projects.

• The Outcome: In 2026, Adelaide’s housing supply will not just stall; it will tighten further. Completion times for new builds will blow out, and costs will surge. This will put a hard floor under existing house prices, likely driving another 8–10% growth year-on-year, completely decoupling Adelaide from the national average, but completely eroding the value gap that Adelaide was once seen to have.

Nationally, 2026 will be a year of "paper supply." Building approvals may tick up, but actual commencements will lag significantly due to these labor constraints and high material costs.

3-Year Forecast (2028): The Affordability Ceiling

By 2028, the narrative will shift from "supply shortage" to "affordability ceiling."

At the current trajectory, Adelaide’s median house price will approach $1.05 million. This creates a mathematical limit. Even with the cash rate normalising around 3.60%, Adelaide’s local wage growth (projected at ~3-4% annually) cannot support median prices above $1.1m for the time being.

• The "Value Gap" Closes: The primary driver of Adelaide’s current boom is its comparative value against the East Coast. By 2028, that gap will have largely evaporated, comparatively reducing inter-state investment.

• Water Infrastructure Lag: We are already seeing warning signs in 2025 with water infrastructure delays in Adelaide’s northern growth corridors. By 2028, even if zoning allows for more homes, the physical pipes likely won't be in the ground to service them, keeping land restricted and prices artificially high.

• Economic Backdrop: Australia’s GDP will likely recover to a healthier 2.2%, driven by a productivity focus as the "per capita recession" of 2024–2025 forces political reform.

Prediction: Adelaide price growth will slow dramatically to 3–4% per annum, tracking roughly with inflation. The "boom" will end not with a crash, but with a plateau of exhaustion as local residents simply can’t bid prices higher and interstate investors look inwards again to their local markets.

5-Year Forecast (2030): The Structural Deficit

Looking out to 2030, we enter the "New Normal." The dream of the quarter-acre block for first-home buyers will be structurally replaced by medium-density living and long-term tenure models, we’re already seeing this happen, with a significant portion of first home buyers being structurally forced to purchase townhouses, tiny blocks, or apartments.

• Institutional Ownership: The "Build-to-Rent" sector, currently in its infancy in SA, will be a maturing asset class. Corporate landlords will own a significant chunk of the inner-ring unit market - think inner city apartments blocks catering to the upper end of the rental market - offering premium services such as gyms and pools on site.

• The Defense Dividend: If the AUKUS submarine construction timelines hold (unlikely?), 2030 is when the true economic "multiplier effect" hits South Australia. High-skilled defense migration may create a permanent "premium" market tier in coastal western suburbs (Semaphore, Largs Bay), decoupling them from the rest of the market.

• National Outlook: Reports from the UDIA and HIA confirm Australia is on track to miss its "1.2 million homes" target by approximately 200,000 to 400,000 dwellings. This failure will lock in high asset prices permanently. We will resemble the UK or Canada—high asset values, high debt, and a stark divide between owners and renters, leading to a sharp increase in inequality.

Final Verdict

Australia’s economy is fragile, but its housing market is armored by failure. We have failed to build enough homes, failed to train enough tradespeople, and face a misalignment of infrastructure timing with residential needs. For an asset owner, this is "good" news—your prices are protected by the supply deficit, but for everyone else this is pretty grim if true.

Adelaide in late 2025 remains the undeniable sweet spot. It possesses the momentum of the East Coast without (yet) the prohibitive price tag. However, the window to enter this market before it fundamentally recalibrates is closing fast—likely within the next 18 months.

By Emma.




References:
The "Soft Landing" & Economic Backdrop

Adelaide’s "Two-Speed" Market Performance

The "Labor Collision" (T2D vs. Residential)

Structural Constraints: Water & Housing Targets

The "Defense Dividend" (AUKUS Impact)


Nick and Emma .