Perth and Adelaide: Why These Markets Are Outperforming in 2026
While Sydney and Melbourne have been stabilising, Perth and Adelaide have delivered double-digit growth. Here's what's driving it — and whether it can last.
Over the past 18 months, Perth and Adelaide have been the standout performers in the Australian property market. Both cities have delivered growth well above the national average, driven by a combination of supply constraints, strong population growth, relative affordability, and robust local economies. For investors, the question is: what's driving this performance, and is there still opportunity?
Perth: The Fundamentals
Perth's property market has been one of Australia's strongest performers since late 2023. After a prolonged period of stagnation following the mining downturn, the market has entered a sustained growth phase.
Years of underbuilding during the downturn have created a significant supply deficit. New housing completions remain well below demand, with construction costs and labour shortages limiting the pipeline.
Strong interstate and overseas migration is driving demand. Perth is attracting workers from eastern states seeking affordability and lifestyle, plus skilled migrants for the resources sector.
Iron ore, lithium, and critical minerals continue to drive employment and income growth in Western Australia, underpinning housing demand across the metropolitan area.
Despite recent growth, Perth's median house price remains well below Sydney and Melbourne, making it attractive to both investors and owner-occupiers seeking value.
Adelaide: The Fundamentals
Adelaide has quietly become one of Australia's most consistent property markets. Once considered a sleepy market, it has delivered sustained growth driven by genuine fundamentals rather than speculation.
Major defence contracts (submarines, frigates) and a growing technology sector are creating high-quality employment and attracting skilled workers to the city.
Adelaide remains significantly more affordable than Sydney, Melbourne, and increasingly Brisbane — attracting both investors and interstate migrants.
Vacancy rates in Adelaide are among the lowest in the country, driving strong rental growth and providing excellent conditions for investors.
Significant state government investment in health, education, and transport infrastructure is supporting property values in key corridors.
Can the Growth Continue?
No market grows at 10%+ indefinitely. Growth rates will moderate as affordability constraints emerge and supply eventually responds. However, the structural drivers — population growth, supply constraints, and economic diversification — suggest these markets have further room to run, albeit at a more moderate pace.
- • Supply pipeline remains constrained
- • Population growth projections remain strong
- • Interest rate cuts improving affordability
- • Employment growth in key sectors continuing
- • Vacancy rates at historic lows
- • Affordability ceiling approaching in some suburbs
- • Commodity price exposure (Perth especially)
- • Potential for investor oversupply in popular pockets
- • Growth rate moderation is inevitable
- • Global economic uncertainty
Quick FAQ
Not necessarily. While the easy gains of the early growth phase may have passed, both markets still have strong fundamentals. The key is being more selective — focus on well-located properties with genuine scarcity value rather than chasing the cheapest entry point.
Look for suburbs with low vacancy rates, proximity to employment centres, good transport links, and a mix of owner-occupiers and renters. Avoid suburbs with large new apartment developments or those heavily dependent on a single employer.
Many successful investors buy interstate. The key is having a strong local team (property manager, broker familiar with the market) and doing thorough research. Rentvesting — renting where you live and investing where the numbers work — is a proven strategy.
Disclaimer: This article is for educational purposes only and does not constitute financial advice. Property markets change rapidly — always verify data with current sources and seek professional advice before making investment decisions.
Module 4 covers property selection, location analysis, and due diligence in depth.