Australia’s property market has delivered a brutal reality check, with Adelaide, once lauded as the nation’s “affordable capital,” now officially the second least affordable city in the country.
This shocking shift sees the South Australian capital edge out Melbourne, sending ripples through the national housing landscape.
According to the latest Demographia International Housing Affordability Report, Adelaide’s median house price has soared to eye-watering new highs with the city-wide median now sitting at $855,000 – just $5000 ahead of Melbourne.
It means Adelaide has now been given a 10.9 Median Multiple score, pushing it past Melbourne (9.7), Brisbane (9.3) and Perth (8.3). It also means it’s now the sixth least affordable city in the world.
Sydney, meanwhile, with a median house price of $1.5m, maintains its unenviable position as the world’s second least affordable housing market (13.8), trailing only Hong Kong (14.4).
MORE NEWS
Aus rental crisis hits essential workers
‘Rate cut inevitable’: The red flags RBA can’t ignore
Aus’s next population hot zones revealed
Source: Demographia
In the report, housing markets are rated from “affordable” to “impossibly unaffordable” based on their median multiple, which divides house prices with median household incomes.
A score of 9 or higher means a city is deemed “impossibly unaffordable” with Australia’s median multiple sitting at 9.7, a figure that places the nation’s housing market as less affordable than virtually any other high-income nation, including Canada (5.4), the UK (5.6), and the US (4.8).
Ray White Group Chief Economist, Nerida Conisbee says the report paints a grim picture for Australian home buyers.
“In global terms, all five of Australia’s major cities fall into the report’s highest category of unaffordability,” she says.
“Surprisingly, Perth – where prices have risen rapidly over the past four years – is now the most affordable of the group, sitting at 8.3 times income.
“High wages go some way to explaining why Perth remains relatively more affordable, although it is still well above the international benchmark of 3.0, which Demographia considers “affordable”.”
MORE NEWS: Australia Post’s bold $500m move
Adelaide has been named one of the world’s least affordable places to live.
Ms Conisbee also highlights Adelaide’s sharp turnaround.
Just a few years ago, the city’s housing market was among the most accessible in the country,” she says.
“But strong price growth has pushed affordability to record lows.
“Prices have risen by 9.1 per cent, outpacing both Melbourne and Sydney.”
The reasons behind this escalating affordability crisis are complex.
While Demographia points to restrictive planning as a key driver, the Australian experience suggests a multifaceted problem.
Limits on urban expansion certainly play a role, but local resistance to higher density housing and the enduring Australian desire for large homes are also significant constraints.
Sydney continues to be Australia’s least affodable city.
Compounding the issue is the sharp rise in construction costs since the pandemic, making new projects harder to deliver and further exacerbating the supply shortage.
“The affordability squeeze is unlikely to improve soon,” Ms Conisbee says.
“September data show national house prices up 8.9 per cent over the year and on track to reach double-digit annual growth by December.
“Any further Reserve Bank rate cuts will fuel stronger growth, while generous first-home buyer incentives are driving sharp gains at the cheaper end of the market.
“New housing supply continues to lag well behind target, with little improvement over the past year.”
English (US) · 