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Which state is the best to invest in? Not only now, but in a longer term too. Strong price growth doesn't always mean a strong area to invest in and build a solid portfolio. This four-part series, this time we unpack everything a serious property investor needs to know about. Victoria, Queensland, South Australia, and Western Australia.
I'm talking population, economic strength, affordability, and my analytical take on each state you won't find anywhere else. And best of all, I'm going to score each state on our InvestorKit leaderboard using three key metrics so you can see the highest and the lowest performance. This episode, we're talking about South Australia. I'm Junge Ma, let's get into it. So population.
Population in South Australia is not looking the strongest. Let me explain why. Over the last year, the population growth in this state was 1. 6%, much lower than Queensland or Victoria, but it's still higher than its own last five-year growth, which was only 1. 2%.
What's happening in the coming four years? According to the federal budget paper, in the coming four years from 2024 to 2028, the projected population growth in total would be 3. 1%, just an average level, not as strong as Queensland or Victoria's projections. However, we need to know population growth doesn't mean everything. We've seen so many cases where population growth isn't strong at all, but the property market has been performing really well.
So now, economy. Again, GSP growth and unemployment rate. In the past year, the gross state product in South Australia grew by 4%. That is actually much higher than the last 10-year growth. And compared to the 2000s average level, 4% is also slightly higher.
So let me explain why I compare it to the 2000s level. That's because during the 2000s, Adelaide experienced a property market boom. And in the past year, South Australia's GSP, gross state product, increased by about 4%. And that is higher than the state's last 20-year average growth. And in terms of unemployment rate, the current unemployment rate is 3.
8%, the lowest in over a decade. And in comparison, the last 10-year average level was 5. 8%. So much lower than the previous level. So to summarize, population in South Australia is not the strongest, while economy is doing really well.
It has been improving over the recent years. So we would like to give the population and economy of South Australia a 4 out of 5 score. Now let's talk about affordability. Adelaide's median house price is now just under $750,000. Again, it is not affordable anymore.
According to InvestorKit's relative affordability calculation, Adelaide is now 22% overvalued compared to the local residents' income level. Just slightly more affordable than Brisbane or Melbourne. And if we look at the rest of South Australia, things look better. The median house price there is now only $400,000. There are 9 SA3 regions in regional Australia in total, and 7 out of 9 of them are still affordable.
But we need to note that the regional towns closer to Adelaide, such as the towns in Barossa region and the towns on the Fleurieu Peninsula, their median house prices are well overvalued, which is unaffordable. An example is Victor Harbour, where median house price is now 26% overvalued compared to its local residents' income level. So now let's talk about market pressure. In South Australia, market pressure is still looking high. Let me explain.
So first, we'll look at inventory level. In Adelaide, the inventory level is currently 1. 5 months of stock, much lower than the 3 to 4 months of the balanced level. This low level has been there ever since 2022. In the regions, we are seeing a different trend.
Many hotspot towns we are monitoring now are seeing their inventory level higher than last year. And in the regions, out of the 9 SA3 regions, 8 of them are still having their inventory lower than 3 months of stock. Some examples are Murray Bridge, 2. 6 months of stock, Barossa, 2. 9, and Mount Gambier, just 3 months of stock.
However, in some of these towns, we are seeing a slightly upward trend in their inventory level, meaning that their supply level is gradually loosening up compared to the housing demand. Now let's talk about days on market. Adelaide has an average days on market of 66 days, and it has been decreasing since the beginning of this year. And if we look at the long term, this level is actually the lowest in over a decade. In the regions, we are seeing days on markets slightly higher than last year, but at the same time, we are not seeing any significant increase in those numbers, meaning that their market pressure has decreased a bit, but it is not decreasing really fast.
And in terms of market cycle position, Adelaide in the past 10 years has grown by 85% in its house value. That is annualized as 6. 4%, just slightly higher than the long term 5 to 6% average. Bigger regional towns are mostly in line with Adelaide as well. For example, Barossa has grown by 91% in 10 years, Murray Bridge 89%, and Mount Gambier 86%.
Although Adelaide and these major towns has grown slightly higher than long term average, based on their currently high market pressure, we're confident there in the coming one or two years, strong or at least healthy growth will be occurring. So now let's quickly talk about incoming supply. In the past 15 months, the total number of new house building approvals represents around 2. 1% of the total house stock in South Australia. And that is a relatively balanced level, not even as high as Queensland or Victoria.
So in the coming few years, we should be expecting really balanced incoming supply, no risks of oversupply really. So to summarize the sales market pressure, we're seeing high and increasing market pressure in Adelaide based on its low and declining inventory and low and declining days on market. And in the regions, we are seeing high market pressure now, although it is slightly increased from last year. So overall, the market pressure in South Australia is still high. So I would give it a five out of five.
And finally, onto rental market pressure, vacancy rate. Adelaide is seeing a extremely low vacancy rate of 0. 5%. True, it is slightly higher than the 0. 3% last year.
However, it is still a long term low. So one thing to note is that Adelaide's vacancy rate has been declining since 2017. It didn't really happen just during COVID. So I would say the low vacancy rate now is in general because of the declined supply and lifted demand because of the improvement in its local economy. And in the regions, most of the regional towns are seeing lower than 1% vacancy rates as well.
The only two exceptions are Flurio, Kangaroo Island, where vacancy rate is 1. 7%, which I believe is because of the number of holiday homes, and the Outback, where the vacancy rate is 1. 6%. So to summarize rental market pressure, we are seeing really low vacancy rates across the whole South Australia. So I would give the rental pressure a five out of five again, bringing South Australia total to 14 out of 15.
Looking back on the leaderboard, Victoria has a score of 11 out of 15. Queensland has a score of 13 out of 15. And South Australia narrowly beats Queensland coming with a 14 out of 15. Our fourth and final episode of this series is Western Australia next week. Do you think it's going to be number one?
Make sure to subscribe and watch next week to find out. As always, if you've got any questions, comment below. I'm Junge Ma, lead research analyst at InvestorKit. I'll see you next week.
