SA’s rental affordability the worst it has been in 17 years

South Australia is currently in the middle of a rental crisis with affordability the worst it’s been in at least 17 years, a new report shows. Find out what’s causing it and where we go from here

Rental affordability has hit its worst level in at least 17 years, and possibly the worst in the state’s history, with a new report revealing a median income-earning South Australian can afford just one quarter of all advertised rents without putting themselves in financial trouble.

PropTrack’s Rental Affordability Index 2024 paints a dire picture of the state’s rental market, revealing the median rent in Adelaide has increased by $170 over the past three years, with regional SA rentals up by $110.

PropTrack senior economist Angus Moore said it was tough for hopeful renters.

“While we can’t definitively say whether today is worse than it was three decades ago we’d have to go back that far to find conditions that challenging by the look of it,” he said.

“Vacancy rates in Adelaide and regional SA are both sitting below 1 per cent and have been since the start of 2021, so it’s very competitive, and that puts pressure on rents.

“While rents are lower in SA than in many other states, they’re not that much lower – Adelaide’s median rent is $540, it’s $550 in Melbourne but wages are quite a bit lower in SA.”

PropTrack economist Angus Moore

In SA, a median income earning household ($91,400) can afford to rent just 26 per cent of all homes advertised over the 12 months to December 2023.

The calculations are based on households spending a maximum of 25 per cent of their pre-tax income on rent.

Households at the 70th percentile of income – $145,100 – could afford to rent 88 per cent of all properties advertised last year, while, most concerningly, households at the 30th percentile of income – those earning $56,100 a year – could afford to rent just 2 per cent.

To provide these figures further context, this means, without spending more than 25 per cent of their pre-tax income on rent, those 70th percentile earners could rent a home up to $690 per week, those median income earners up to $430 per week, while those at the 30th percentile were capped at $250 per week.

MORE NEWS

SA farming history up for grabs – but it doesn’t come cheap!

Popular home snapped up in eight days for more than $2m

New record for Adelaide suburb following multimillion-dollar sale

Concerningly, the greatest price increase nationally has been for our most affordable homes, with the most affordable 10 per cent of properties increasing by almost 45 per cent over the past three years, while those at the top 20 per cent of the market have increased by just over 30 per cent.

According to the report, this deterioration in affordability has been driven by the significant increase in rents since the pandemic – growth wage increases have not kept pace with.

Turner Real Estate chief executive Emma Slape. Picture: Brad Griffin

Turner Real Estate chief executive officer Emma Slape said hopeful tenants faced fierce competition, in a market that had seen so much growth.

“We’re seeing properties are generally falling well above $450, if not $500 a week for a modest three-bedroom family home, which is quite a large percentage of many households’ family income,” she said.

“The price rises in the past few years have accelerated that gap of affordability, and with not a lot of rental stock coming onto the market it’s going to be a very slow burn until it changes.”

Ms Slape said new listings in the $450 to $500 range were attracting more than 100 inquiries, and that is was not uncommon for families to report having applied for more than 20 properties without success.

“It’s not because they’ve got a poor application, it’s simply because there’s so much demand and there’s not enough stock on the market,” she said.

Alejandro Maturana and Stephanie Opazo outside a property they inspected this week. Image/Russell Millard Photography

Alejandro Maturana, 35, and Stephanie Opazo, 33, have recently moved to SA from Queensland to work and study.

Having been staying with friends in Prospect, yesterday they secured a rental at Glynde.

“We attended about 15 inspections, and some of them have had a lot of people at them,” Mr Maturana said.

“We used to live in the CBD in Queensland and were paying $700 per week for a small apartment, but here you can find a big house for the same price.”