Price growth: Adelaide claims top spot as Melbourne rebounds

Australia’s residential property market continues to surprise investors as Adelaide emerges as the fastest-growing capital city for price growth in early 2025. According to the latest data from CoreLogic, Adelaide recorded a 1.4% increase in home values in March alone, edging out other major cities and showcasing remarkable market resilience.

What’s Driving the Rapid Price Growth in Adelaide?

Adelaide’s strong performance in the property sector is underpinned by:

Low housing supply relative to demand
Affordable entry points compared to Sydney and Melbourne
Continued demand from interstate investors and first-home buyers
Economic stability and improved infrastructure development

With median house prices still sitting well below eastern counterparts, investors are increasingly turning their attention to South Australia’s capital.

Melbourne’s Market Rebounds: A Sign of Recovery?

Following several months of stagnation, Melbourne has made a modest yet promising comeback. In March 2025, dwelling values in Melbourne rose by 0.1% — its first uptick since late 2023. While the pace lags behind Adelaide, the positive change signals renewed buyer interest and improved consumer confidence in Victoria’s capital city.

Experts believe Melbourne’s recovery is bolstered by:

Price corrections making properties more attractive
International migration and student return driving rental demand
Stabilised interest rates that have calmed buyer hesitation

National Outlook: How Other Capital Cities Performed

Although Adelaide took the lead, other capital cities also experienced varying levels of growth:

Brisbane: Up by 1.1% in March
Perth: Rose 1.9%, continuing strong gains
Sydney: Grew by 0.3%
Hobart: Declined by 0.2%
Canberra and Darwin: Mostly flat or slightly down

This performance highlights a diverse landscape where affordability, migration patterns, and local economic conditions are shaping individual markets differently.

Suburbs with Standout Performance

Not all price growth is city-wide — certain suburbs are leading the charge:

Para Hills (Adelaide): Observed significant year-on-year growth due to affordability and location
West Footscray (Melbourne): Popular among first-home buyers for its proximity and revitalisation projects
Logan Area (Brisbane): Continues to attract budget-conscious investors looking for long-term gain

Investment Outlook: What Should Investors Focus On?

With evident shifts across different markets, strategic property investors should:

Focus on affordability-driven areas with growth potential like Adelaide’s northern suburbs
Monitor infrastructure projects and planned developments, particularly in Melbourne’s west
Leverage rental yield opportunities in high-demand suburbs
Stay informed about economic drivers and population trends

Investors looking to explore emerging suburbs can benefit from using tools like realestate.com.au’s Investor Hub, which offers market insights, forecasts, and suburb analytics.

Final Thoughts: Australia’s Property Market Diverging in 2025

As 2025 progresses, Australia’s housing markets are witnessing a multi-speed recovery. While cities like Adelaide and Perth outperform the national average, others like Melbourne are beginning to show green shoots. For investors, keeping a close eye on market movements and adapting strategies accordingly will be essential for long-term success in this ever-evolving landscape.

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