Adelaide, often referred to as the “20-minute city” thanks to its ease of commute, is emerging as one of Australia’s top economic powerhouses. While it once lagged behind the more populous states, South Australia’s capital is now experiencing a remarkable economic transformation.
The SA unemployment rate in June 2024 was only 3.9%, below the national rate of 4.1%, and Adelaide’s economy has played a key role in keeping it down. The city is undergoing a major boom, with growth in various sectors, increasing employment opportunities, and a steady rise in population. This tremendous growth is putting Adelaide on the map, attracting both property investment and business ventures.
Let’s check out how the local economy in Adelaide is transforming.
Economic Growth Fuelled by Key Sectors
Adelaide is the beating heart of South Australia’s economy and continues to attract billions in investments from the public and private sectors. Here’s a quick look at some of its landmark investments so far.
1. Defence and Technology
Adelaide has been Australia’s defence hub for a while. With billions of dollars invested in shipbuilding and the defence industry, projects like the new submarine construction yard at Osborne have led to a massive economic surge. Locals are set to benefit from this influx of investment, with the project expected to employ 4,000 workers at its peak.
2. Renewable Energy
South Australia is leading the charge in renewable energy, with a $20 billion pipeline of investment for on and off-grid renewables and storage, including the SA Hydrogen Jobs Plan – a flagship renewable project in Whyalla.
Under the SA Hydrogen Jobs Plan, the State Government has already committed $593 million to build a world-leading green hydrogen power station. This push towards renewables is not only creating new jobs but also attracting businesses that prioritise sustainable operations.
3. Education and Innovation
Adelaide is also home to many prestigious universities and research institutes, including the University of Adelaide, which is ranked in the world’s top 100 universities and recognised as one of the leading research facilities around the globe.
As an education and research hub, the city continues to attract international students and researchers, which has helped Adelaide’s economy grow substantially over the years. Given this, it’s no wonder the city’s start-up ecosystem increased by 19% and reached $1.9 billion in 2024. This influx of investment has helped Adelaide land in the top 100 emerging start-up ecosystems around the world for the first time.
4. Health and Biotechnology
The health sector in Adelaide is expanding, with milestones like BioMed City, a $3.8 billion health and medical innovation district in the heart of Adelaide. It is one of the largest health and life sciences precincts in the Southern Hemisphere.
SA’s focus on health and biotechnology is bringing in global research collaborations and clinical trials, giving an unprecedented boost to the local economy in Adelaide. In addition to creating jobs, this strategy provides a fertile ground for healthcare innovation and supports long-term economic growth.
5. Infrastructure Boom
Adelaide’s infrastructure is rapidly evolving to support its growing population and economic ambitions. Over the past few years, major infrastructure projects have transformed the city. These include new roads, better public transport, and improved air connectivity – all of which have helped the local economy in Adelaide.
For example, the final stretch of the North-South Corridor upgrade, the $15.4 billion Torrens to Darlington (T2D) section, is expected to be finished by 2031. The project is expected to employ 5,500 people a year at its peak and create several business opportunities, fuelling Adelaide’s economy.
6. A Vibrant Job Market
As Adelaide’s economy grows, so does its job market. The unemployment rate in South Australia has been consistently lower than the national average, thanks to growth in industries like defence, education, health, and renewables.
This is great news for those seeking work and for local businesses looking for skilled talent. More jobs mean a higher demand for housing, which in turn supports the growing property investment market.
Property Investment in Adelaide and Its Suburbs
With such rapid economic development, Adelaide’s real estate market is becoming increasingly attractive. Investors are flocking to the city due to its solid rental yields and growing demand for residential properties.
Let’s break this down for you:
1. Lower Cost of Living
While Sydney and Melbourne struggle with the high cost of living, Adelaide offers a relatively affordable yet high standard of living. It is 16% cheaper than Sydney and 13% less than Melbourne, which often attracts students, young couples, and families to the city. As the dwelling prices or rentals are also more affordable in Adelaide, the city has better property investment options, especially for first-time investors.
2. Strong Rental Yields
Adelaide’s property market offers strong rental yields, particularly in areas close to the city centre and in growing suburbs. Nearly half of the city’s population (49.54%) lives in rental accommodations, and the median rental yield in Adelaide for houses is 4.48%.
If you have an investment property in a growth area where there is expected to be much economic activity, then it will be in demand. A well-maintained property in these areas will be expected to obtain an excellent rental income, with a unit getting $520 and a house $595 per week.
3. Affordable Property Market
In contrast to Sydney and Melbourne, it’s cheaper and easier to buy a new or old house in Adelaide. In 2024, the median dwelling price in Sydney was $1,180,463, with an expected return of 8.3%, while it was $790,789 in Adelaide, with a total return of 19.4%.
With lower median prices and higher returns, Adelaide is an attractive option for those who want to invest without breaking the bank. This also means you don’t need a large down payment to buy an investment property in Adelaide and can cover the rest of the cost with an affordable home loan.
4. Population Growth
Adelaide keeps attracting interstate and overseas migrants thanks to its more relaxed lifestyle, affordable housing, and growing job opportunities. Population growth is a critical factor in the growth of the investment property market because more residents mean increased demand for housing.
Find The Right Investment Property in Adelaide
Adelaide’s rise is not a passing trend. With growing infrastructure and a real estate market turning heads, Adelaide’s economy is set for long-term growth. The city’s lifestyle, affordability, and job opportunities are drawing people from all over, creating a strong demand for housing. For investors, this presents a golden opportunity to tap into a growing city that is only getting started.
My Money House is here to help you get your investment journey started on the right foot. Whether you are looking for a property or need help managing one, we are here to help. Contact us to know how we can help you.
