Well, it has finally happened – Adelaide officially has a $1m median house price.
REA Group’s February Home Price Index reveals Adelaide’s median house price has reached $1.01m, climbing $20,000 on last month’s median, and a whopping $128,4000 over the past 12 months to a record high.
This represents a 0.7 per cent increase over the past month, and a 14.6 per cent jump over the past year.
Adelaide’s combined dwelling price has also climbed – $118,600 or 14.8 per cent over the past 12 months to a new high of $929,000.
That’s up 0.7 per cent or $14,000 on the $996,000 it recorded last month, and represents a 93.5 per cent increase – almost double – over the past five years.
Adelaide’s unit price has also soared – up 15.2 per cent or $90,800 over the past year to a record $692,000.
REA Group senior economist Eleanor Creagh.
REA Group senior economist Eleanor Creagh said, with Adelaide’s median house price now just $2000 behind Melbourne, SA was now one of Australia’s least affordable capitals.
“Affordability has deteriorated,” she said.
“It would be a headwind to the pace of growth and with rates moving higher this year.
“But prices are still moving at a strong pace.
“Even if we see the annual pace of growth halving at 7 per cent, that’s still strong growth.”
She said the report would come as a blow to younger first-home buyers.
“Conditions have become more challenging,” she said.
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“We know the deposit hurdle is difficult.
“There are various homebuyer schemes to support entry, but the only sustainable way to improve affordability is to increase supply.”
And they can expect further bad news throughout the year.
“Affordability would be a headwind, but there is still enough undersupply in Adelaide to suggest growth will continue,” she said.
South Australia’s statewide medians are, as expected, up as well.
SA’s median house price has climbed by 12.8 per cent or $58,700 over the past year to $512,000.
Its combined dwelling – both houses and units – median is up $58,300 or 13 per cent over the past year to $504,000, while the statewide unit median is up 15 per cent or $61,800 to $459,000.
SA’s statewide combined dwelling median has also almost doubled over the past five years – it’s up 97.3 per cent over this period.
REISA CEO Andrea Heading. Supplied
REA Group CEO Andrea Heading said living in a million-dollar suburb used to be a measure of status, whereas now half of metropolitan Adelaide residents do it.
“It used to be what separated the haves and have nots but now it’s the norm for the majority of people that do own a home.
“I wonder what the next dinner party conversation is, because it used to be how much your house was worth and how much you bought it for, and that difference must be even more pronounced now for those that have had their home for a few years.”
She said, with many young people priced out of the market it was their responsibility to do their homework to find more affordable alternatives to their first preference.
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“Maybe look further afield – the north/south corridor is reshaping Adelaide, and while some of these places used to be seen to be a long way from the city, they’re now really viable options as supportive infrastructure keeps up.”
She repeated REISA’s call for the State Government to abolish stamp duty, conceding widespread tax reform was needed, and necessary, to make up the shortfall in government coffers this would create.
Amy and Jesse Sumner with children Hamish and Alex at their Mount Barker home. Picture: Emma Brasier
Custom Steel Appeal business owner Jesse Sumner, 38, bought in Mount Barker with his wife Amy in 2017 and said he had seen prices “explode” around him in that time.
“To the point that I couldn’t afford it if I had to buy it again,” he said.
He said he had grave concerns about his children being able to afford a home on their own down the track.
“It feels like I’m going to have to help them,” he said.
“I’m not going to have much of a choice.
“I don’t think it’s actually possible to buy a home without help from the Bank of Mum and Dad anymore.
“It’s right on the edge anyway, as it is.”
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