Why Adelaide Land Prices Have Slipped Back Below Melbourne's

Journalist Jessica Brown reported for realestate.com.au on new Oliver Hume Property Group research showing Adelaide land prices have fallen back below Melbourne's after a period of rapid growth. The research, drawn from thousands of land sales across Adelaide, Melbourne and South East Queensland, points to worsening supply constraints and a cooling established market as key drivers behind the pullback.

Adelaide and Melbourne Land Market Trends

The median price of Adelaide land fell 2.6 per cent over the June quarter to $390,500, though it remained 15.7 per cent higher over the year. Adelaide's median had overtaken Melbourne's in March, but the quarterly decline has pushed it back below Melbourne's $404,000 median, which itself dipped 0.2 per cent over the same period. Adelaide's land sales volume also fell sharply, down almost 17 per cent to 310 sales, compared to 545 in the December quarter and 488 in the June quarter a year earlier. Prices rose across three of Adelaide's five major markets, while Onkaparinga and Playford recorded declines of 3.1 per cent and 16.2 per cent respectively, with Playford accounting for roughly 65 per cent of all sales in the quarter.

What the Cooling Means for Buyers and the Adelaide Property Market

Oliver Hume chief economist Matt Bell said the slowdown in Adelaide's land price growth was an inevitable correction after two years of excessive gains, noting that rising prices eventually put a cap on buyer demand. He pointed out that cooling in the established home market was also likely to weigh on sentiment and demand for new housing. Harcourts Packham Property director James Packham offered a more resilient outlook, forecasting annual property price growth of around 5 to 9 per cent for South Australia, supported by strong buyer demand and limited supply. Packham also noted that the expanded Federal Government 5 per cent Deposit Scheme was helping first-home buyers enter the market sooner, while increased lender competition had led some banks to cut home loan rates despite recent Reserve Bank increases.

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