Adelaide Hills property market predictions for 2026
Key takeaways: What will happen in the real estate market in 2026
- Houses under $800K will sell fast. Properties over $1M will need a special strategy.
- Expect modest house price growth between 4-5%.
- Interest rates won’t be cut and there might even be increases.
It’s going to be an interesting year for the Adelaide Hills real estate market in 2026.
We have a number of dynamic factors at play that will make having a real estate strategy even more critical (especially at specific price points).
Here’s what we’re seeing on the ground, here in the Hills.
The ‘affordability ceiling’
We touched on this in our December market update, the ‘affordability ceiling’ is impacting the market, specifically for properties over $1 million. If you have a house for sale that’s over the $1 million mark, you’re seeing a very different response compared to properties under the median price (e.g. $760K in Mount Barker).
Two markets at play
Since the Federal Government expanded the First Home Guarantee Scheme up to a price cap of $900K in Mount Barker, the market up to that price has remained really strong – and this will continue in 2026. Even slightly above that is holding up, because people selling in the $700-900K range are buying in the $900K-one million range.
However, there’s a hard ceiling above that.
Domain recently cited that just over 51% of the median income in our area is now going towards mortgage repayments. That’s well above the 30% cap that most financial experts suggest for housing.
When over half of a household’s income goes straight to the bank – and incomes aren’t growing at the same pace as house prices – the money isn’t there to push buyers higher.
Houses at $800K are hot
The Adelaide Hills is undersupplied with houses under $1 million (which is wild to say). This means anything under $800K will be very hot, and even up to $900K will remain strong.
Houses $1M+ need a special strategy
For sales over $1 million, this is where the strategy will really matter. Here are some tips.
- Quality over quantity: You won’t see 20 groups at an open home. You might not even see five. But the buyers you do see will be genuine.
- Private inspections: These will be back on the agenda. Buyers will want to inspect two, three, or four times. They will have a lot of questions.
- Extra preparation: You need to have every detail ready to answer those questions and engage a buyer when they emerge.
- Time on market: Expect a return to a traditional, balanced market. It might take two, three, or even four months to sell at that price point.
Expect a ‘soft landing’
At Nitschke, we agree with Domain’s forecast of modest house price growth between 4-5%. This is a ‘soft landing’ for a market that’s been growing 12-20% annually for the past five years.
Unless there’s a sudden spike in demand or government intervention, we don’t expect to see huge growth in 2026. The market will level out.
Inflationary environment continues
We’re still in an inflationary environment. It looks like interest rates won’t be cut and there might even be increases in 2026. Historically, when that happens, the real estate market slows down.
This has been the case in the Adelaide Hills before.
Rental market strain
Vacancy rates remain low because people who can’t afford to buy yet continue to rent, and we simply don’t have enough houses. This puts tenants in a tough position, but it could be good news for investors – who may see rents edge up a little more.
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