Will interest rates rise or fall? Will prices keep going up? Should I buy or wait? Those are the questions buyers are asking as we head into 2025.
Aside from Perth, Adelaide saw the strongest home price growth in the nation during 2024, reaching a median price of $850,000 in metropolitan Adelaide by December.
Record high prices, the soaring cost of living and unmoving interest rates pushed home buying out of reach for many South Australians, but with inflation and possibly interest rates starting to fall, could buying property in Adelaide become more affordable this year?
National Property Trends
A report by PropTrack showed home prices dropped 0.17% nationally in December. price growth momentum had been slowing since March 2024.
While price growth momentum slowed from March to December 2024, national home values did increase by 4.7% during 2024 according to PropTrack, bringing the median home value in Australia to $795,000.
But national trends don’t really help Adelaide home buyers make confident decisions, when cities such as Melbourne, Darwin and Canberra have seen minor home price decreases and others such as Adelaide, Brisbane and Perth report record home price growth.
In her report PropTrack senior economist Anne Flaherty said, “This disparity in market conditions is expected to continue in 2025, though with price growth tapering in most markets, divergences are likely to be less extreme.”
The Impact of Interest Rates
A key factor affecting housing affordability is interest rates.
In Adelaide, home price values increased significantly while the cash rate remained unchanged throughout 2024. A decrease in interest rates may make it easier for buyers to access the housing market, but an interest rate drop could push property prices higher as a result of increased borrowing power and mortgage repayment affordability.
Migration
Migration ties directly to housing accessibility through supply and demand.
An article by SBS suggests that the Australian government’s reduced migration program for 2024-25 is likely to cause less aggregate housing demand which, combined with an increase in the number of new homes coming into the market should reduce buyer competition and improve housing affordability.
Personal Property Goals
With so many economic factors in play and no crystal balls on hand, Adelaide’s real estate agents will always say that the right time to buy property in Adelaide for a long-term investment is when you are ready.
Property markets rise and fall, so if you have your finance organised and you can afford mortgage repayments, 2025 will be as good a year as any to buy a home in Adelaide.
