SA’s lack of affordability laid bare

SA’s housing unaffordability is so bad there is one area where median-earning households can afford to buy just 2 per cent of the homes there. And believe it or not, it’s in metro Adelaide …

Adelaide’s booming house price growth has dampened affordability across South Australia to the point where the average buyer looking to purchase in one particular region could afford to purchase just two out of every 100 homes there.

According to PropTrack’s Affordability Hotspots 2024 report, median income earning households – those earning $91,400 and spending 25 per cent of their pre-tax income on mortgage repayments – could afford to buy just two per cent of all homes sold from July 2023 to March 2024 in the Australian Bureau of Statistic’s Statistical Area 3 region of Port Adelaide – West.

This area includes suburbs from Outer Harbor to Semaphore South and across to Devon Park and is bounded by the Gawler line and the Barker Inlet.

The region has experienced a price growth of 12 per cent over the past year – growth Ray White Port Adelaide principal Nick Psarros said was keeping young people out of the market.

“The growth has been phenomenal – and wages aren’t keeping up,” he said.

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“The Bank of Mum and Dad is not just common, it’s necessary – and they’re not giving $20,000 or $30,000 anymore, it’s $100,000, maybe $200,000.

“The goalposts keeps moving and moving quickly.

“And there’s no indication that will change any time soon – as long as there are low stock levels and high demand, the price will increase.”

Nick Psarros of Ray White Port Adelaide. Supplied

Buyers looking to enter the market in the Salisbury, Gawler – Two Wells, and Playford SA3’s didn’t fare much better, with median-priced households able to afford just 4 per cent, 5 per cent and 7 per cent of all homes advertised for sale there last year respectively.

Harris Real Estate’s Mark Lloyd, who sells in all three of these SA3s said he felt for those trying to buy.

“Trying to get into the market as a youngster is pretty difficult and I reckon in the next decade it’s going to get even tougher,” he said.

“I’ve been doing this for 22 years and I’ve never seen anything like this – I don’t see it stopping any time soon.

“Interstate buyers have got a lot to answer for as far as purchasing properties and driving those prices up.”

Mark Lloyd of Harris Real Estate. Supplied

According to the report, Adelaide’s strength was also its biggest weakness.

“Strong price growth across Adelaide has dampened the favourable affordability conditions that have supported the market since the onset of the pandemic,” the report read.

“As many first-home buyers continue to search for regions with relative affordability, Adelaide City remains an affordable option despite a period of very strong price growth, largely due to the higher concentration of units within the CBD,” the report read.

Median income-earning households looking to purchase here fared slightly better, with 12 per cent of properties advertised for sale last year within reach.

Buyers looking to enter the market have their best chance of doing it in regional South Australia, with 57 per cent of homes in the Outback – North and East SA3 within reach of a median-earning household.

Those looking to purchase in the Mid North, specifically the Barossa – Yorke – Mid North geographic locations, could afford to buy almost half of the homes there, at 47 per cent.