Dina Walton has a Two Wells investment property and hopes to retire in the next few years. She doesn’t want to see any changes that would disadvantage her. Picture: Dean Martin.
Adelaide is the mainland capital with the most to lose from a Capital Gains Tax shake up, with half the city in the firing line and a full-blown rental crisis on the horizon.
New research by property analytics firm FoundIt reveals every capital has pockets of vulnerability under possible CGT reform, but both Adelaide’s northern and southern corridors are exposed, making it a citywide issue.
FoundIt modelled the likely real-world outcome of the federal government slashing the longstanding 50 per cent CGT discount and found outcomes varied across the country.
The move, expected to be announced with the May federal budget, would stop many investors buying in areas reliant on them and stall the supply of new rental homes.
While Adelaide houses ranked second behind Hobart’s for CGT sensitivity, FoundIt director of research Kent Lardner said its absolute number of suburbs affected was greater.
Why Adelaide stands apart: the numbers that matter for CGT sensitivity. Source: FoundIt CGT Impact Model, January 2026 data. Critical yield zone is the gross yield band (3.5–4.5 per cent) where leveraged house investors are most reliant on capital growth expectations.
“Here, the conditions that make a house market sensitive to changes in capital gains tax concessions – affordable prices, yields that sit in the investor ‘sweet spot’, active investor buyer pools – do not cluster in a narrow band on the city’s edge,” he said.
“If there is a single number that defines Adelaide’s CGT vulnerability, it is this: more than half the city’s suburbs – 51 per cent – sit in the gross yield range of 3.5 to 4.5 per cent on houses.
“No other mainland capital comes close.
“This matters because the 3.5 to 4.5 per cent yield band is where the CGT concession does its heaviest lifting.”
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Average investor activity across Adelaide, Mr Lardner said, sat at 17 per cent – the highest of any capital.
Houses in the Salisbury area – which has a median price of $783,000, a 3.9 per cent gross yield and prices grew 13 per cent over the past year – were most exposed to CGT changes, with one in four buyers being investors and 29 per cent of the population renters.
Those in Onkaparinga – which has a median price of $902,000, a 3.6 per cent yield and prices grew 12.5 per cent in the past year – followed, with 1 in 5 buyers investors and 21 per cent renters.
Adelaide’s top 10 areas most exposed to CGT changes on houses. Source: FoundIt CGT Impact Model, January 2026 data. Areas (Statistical Area 3) ranked by composite CGT impact assessment across investor activity, pricing, yields, rental tenure and dwelling composition. Key suburbs listed are the largest or most recognised within each area.
At a suburb level, Paralowie houses were the city’s most sensitive, with 50 per cent of purchasers investors, followed by Hackham West, Hackham and Seaford.
The suburbs with the highest sensitivity are priced between $700,000 and $900,000, a range that captures nearly 40 per cent of all Adelaide suburbs.
Reform would pass unnoticed in the some suburbs, mainly the established eastern suburbs and the beachside strip where prices were high, yields low and owner-occupier were predominant.
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Mr Lardner said if investors, who were partially responsible for Adelaide’s price rises, felt there was not much more opportunity for capital growth, they wouldn’t keep buying “leaving tenants high and dry.”
“In suburbs like Davoren Park (44 per cent renters), Hackham West (36 per cent), Salisbury North (35 per cent) and the Port Adelaide areas (34 per cent), a substantial share of the population depends on investor-owned housing,” he said.
Adelaide resident Dina Walton bought a four-bedroom Hickinbotham investment property in Two Wells’ Liberty Estate last year, confident that was the best way to grow wealth.
Adelaide’s eight most CGT-sensitive suburbs for houses. Source: FoundIt CGT Impact Model, January 2026 data. Suburbs are Statistical Area 2 classifications.
It was her way of ensuring a comfortable retirement and creating intergenerational wealth for her children.
“Looking at my super balance, I was worried it wouldn’t be enough and I’m confident investing in property will have a greater yield, helping me live the life I want to in retirement,” she said.
“While Two Wells has enjoyed 186 per cent house price growth from 2020 to 2025, I feel I purchased at the right time and got good value.”
Ms Walton said speculation about CGT reform concerned her, so much so she has put plans to buy another investment property on hold.
“A significant rolling back of the CGT could have a huge impact on the financial decisions I make moving forward,” she said.
“I’m not the only one in this boat, given most investors are like me.
“We’re not running huge property portfolios, we’re just trying to look after ourselves in retirement and secure our futures.”
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