Demographia research ranks Adelaide 14th in list of world’s least affordable cities for housing, equal to London

Adelaide ranks alongside one of Europe’s grandest cities for affordable housing – and it’s not good news.

Adelaide’s housing market ranks with London as among the world’s least affordable according to a global study, which attributes the pandemic and urban growth boundaries on escalating house prices.

Demographia’s International Housing Affordability Index puts Adelaide and the Greater London area as the equal 14th-least affordable globally with the median house price eight times the median gross household income in 2021.

Sydney is the world’s second-least affordable – with a median house price 15 times greater than median household income. Melbourne, Brisbane and Perth ranked 5th, 17th and 20th respectively.

All Australian capitals have been classed as “severely unaffordable” since Demographia began its rankings in the early 2000s.

The skyline of London, which is as affordable for housing as Adelaide is, according to the Demographia report.

The research rated affordability of 92 markets in Australia, Canada, China, Ireland, New Zealand, Singapore, the United Kingdom and the United States.

Hong Kong was the least affordable in the world with a housing cost to income ratio of 23.2.

“As the pandemic and lockdowns continued into a second year, the movement of households from denser urban neighbourhoods to larger homes, often with large yards (gardens) in suburban and outlying areas has continued,” the report’s author Wendell Cox says.

“The result has been to drive up prices at unprecedented rates in many markets. As a result many low-income and middle-income households who already have suffered the worst consequences from housing inflation will see their standards of living further decline.”

The report says the number of “unaffordable markets” rose 60 per cent in 2021 compared with 2019, before the pandemic hit.

Adelaide’s median house price has jumped 24.83 per cent to $584,629 in the past year.

The median full-time South Australian worker’s wage was $72,436 according to latest ABS data to August last year.

The report also attributed urban growth boundaries to deteriorating housing affordability.

“Along with other strategies, urban containment make it impossible to profitably

build tracts of housing affordable to middle-income households due to much higher land prices,” Mr Cox wrote.

“Whatever its advantages, urban containment has been associated with huge cost of living and housing-cost escalation relative to incomes, thereby increasing poverty and inequality.”

The Urban Development Institute of SA says urban infill in existing suburbs – such as that above – is not making housing more affordable. Picture: Renato Castello

The Housing Industry Association of SA and Urban Development Institute of SA were critics of the SA’s urban growth boundary, which was introduced in 2017 to contain Adelaide’s housing footprint in established suburbs and protect environmental and agricultural land from housing subdivision.

The Advertiser reported the UDIA’s concerns that urban infill – the demolition of existing houses and subdividing blocks – had not improved housing affordability.

HIA executive director Stephen Knight said housing affordability must be a priority of the new state government.