Market shift: Adelaide unit price growth outpacing houses

Houses have long reigned supreme in Adelaide but a new-found demand for units is driving prices up at a faster rate.

Latest PropTrack data shows unit values climbed 9.87 per cent in the year to September – or $57,200 – while those of houses rose 8.79 per cent – or $74,000.

The growth takes the median unit price to $642,000 and the median for houses to $925,000.

While there was still a significant divide between the median house and unit price, experts said it was gradually narrowing.

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Adelaide unit prices have climbed 9.87 per cent over the past year – more than house prices. Picture: Brenton Edwards.

Ray White Adelaide City director Andrew Downing said a recent spike in demand for units was pushing prices up at a more rapid rate than it has in the past.

“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,” he said.

“If you go back traditionally over the decades, unit prices have hardly changed.”

While apartment blocks were mostly reserved for students a decade ago, Mr Downing said that wasn’t the case anymore, especially as more quality and luxury offerings were available.

He said it wasn’t until a couple years after Covid that unit prices started to rise more dramatically.

Much of that, he said, could be attributed to interstate buyers getting priced out of Melbourne and Sydney, as well as the lack of land to build.

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Ray White Adelaide City director Andrew Downing. Picture: supplied.

“Adelaide has become a destination place, people want to come over here for the first time, that underpins prices,” Mr Downing said.

Affordability was also a major factor, he said, with more people attracted to one-bedroom apartments as an entry-level home despite them once being the hardest to sell.

Turner Real Estate chief executive Emma Slape said her agency was noticing a change in preference for units over houses because it was a better entry point.

She said first-home buyers and even small families were opting for units because they were more affordable and offered other lifestyle benefits.

“Years ago we wouldn’t have seen as many first-home buyers or even people having a life change,” she said.

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Turner Real Estate chief executive Emma Slape. Picture: Brad Griffin.

“Now they want to be close to the city to access better schools and save on transport costs.”

Ms Slape said newer apartment complexes that had a bigger community focus and offered more flexibility, including allowing pets, also made units more appealing than ever before.

She believed demand for and the price of units and apartments would grow as house values continued to climb.

“As we close the gap, we’ll probably see prices in the unit market rise at the same pace as house prices,” she said.

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