Adelaide real estate now Australia’s second least affordable with ‘key worker’s priced out

Adelaide is now the second hardest housing market in Australia to buy into, with only one city doing it tougher.

Typical workers can no longer afford to buy an entry-level Adelaide home, research reveals, because a $150,000-plus household income is needed to afford new housing across multiple suburbs.

In grim findings for aspiring homeowners, the Property Council research reveals Adelaide is now the nation’s second-most unaffordable housing market, after Sydney, when considering prices relative to income.

The bleak outlook is intensified by the forecast of a more than 10 per cent surge by 2030 in the proportion of household income required to service a mortgage for an entry-level Adelaide home.

Property Council state executive director Bruce Djite urged a “war-footing” response to tackle the worsening housing crisis, demanding the slashing of government taxes, fees and charges now comprising 30 per cent of the cost of new homes.

The 40-page report details research across 12 Adelaide suburbs, including Salisbury, Christies Beach, Tea Tree Gully, Mount Barker, Munno Para, Seaton and Magill, finding most are beyond the reach of “key workers” including teachers, electricians, shop assistants, public servants, and ambulance and police officers.

Home ownership in these suburbs often requires five to nine times the average “key worker” income, the report finds, revealing an household income of more than $150,000 is required for new, entry-level housing. Adelaide’s median household income is $78,000.

Property Council SA executive director Bruce Djite. Picture: Tom Huntley

Mr Djite said the report contained damning case studies of key workers quantifying that Adelaide housing was beyond the reach of everyday people.

“This report is a wake-up call to the government to slash the cost of developing housing. Across a variety of households, workers from both blue and white-collar industries are priced out of the market,” he said.

“To truly promote affordability and boost housing supply, it is imperative that governments – both state and local – slash taxes, charges, and compliance costs associated with developing new housing.”

Little hope was offered by potential interest rate falls, because even a one per cent rate cut would have “minimal impact on affordability” for households with annual income of $100,000.

Asked by The Advertiser about potential to slash government charges on housing, Premier Peter Malinauskas highlighted the abolition of stamp duty for new builds and said “we should always be looking for those options”.

Opposition Leader Vincent Tarzia blamed the housing crisis on Labor, highlighting it had been in government for all-but four years since 2002.

Julian Vella and Emily Farbrace settled on their Salisbury East home in November 2024. Picture: Supplied

Tradie Julian Vella and his partner, receptionist Emily Farbrace, had to increase their budget beyond the $600,000 limit for first-home concessions after battling tight competition, eventually buying a home in Salisbury East last November.

“We’d go to inspections and there’d be 20, 30, 40 people going in,” said Mr Vella, 23.

“We sacrificed quite a bit as young people … there’s no right or wrong way on how people live their lives but we sacrificed going out every weekend like other people do.”