Debate settled: The generations that have it worst when buying a home

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A new report has settled the argument of which generation of homebuyer had it the hardest once and for all.

Unequivocally, it’s Gen Z. And the outlook for Gen Alpha looks bleak as well.

Exclusive PropTrack data has revealed the cost of buying a house or unit in Adelaide today far eclipses what it did in previous decades, even when you factor in inflation.

In 1990, Adelaide’s median house price was $98,000, which in today’s money would be $247,800.

Yet Adelaide’s median now sits at $832,500, making it 8.49 times what it was back them, and 3.5 times what it would have been in today’s dollars.

Ellissa Noolan, 27, and her partner Ryan Litchfield, 30, have recently bought their first home, despite rising prices. Pic: Dean Martin.

The gap closes slightly when you look at the year 2000 when it was $135,000, or $264,000 in today’s dollars.

That makes today’s median more than six times what it was then, and still 3.15 times what the 2000 price would be in today’s currency.

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In 2010, Adelaide’s median had leapt to $405,000, or $592,600 in today’s money, making today’s median more than double this, and almost one-and-a-half times more expensive than what that 2010 median would have been in today’s money.

PropTrack economist Angus Moore said the rapid growth in home prices since the early 1990s was linked to lower interest rates during that time.

The cash rate now sits at 3.85 per cent compared to a high of 17 per cent in 1990.

“Interest rates are a lot lower and more stable than they were in the 1980s or 1990s, which has made mortgages more affordable,” Mr Moore said.

PropTrack economist Angus Moore pictured

Lower interest rates reduce the cost of borrowing, allowing buyers to afford larger loans, which can drive up property prices.

For first-home buyers, the boost in borrowing power does not offset the growing cost of saving for a deposit.

“The deposit hurdle is just unequivocally harder than it was four or five decades ago, and that has manifested in home ownership rates which have fallen over those years,” Mr Moore said.

“Most first-home buyers don’t have a 20 per cent deposit available.”

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House price growth across Adelaide has far surpassed inflation. Picture: Supplied by Colliers

According to the data, Adelaide’s unit value has also soared ahead of adjusted prices, with the current median of $566,000 seven times the actual price of $80,000 in 1990, and 2.9 times what that would be in today’s money.

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In 1990, Adelaide’s most expensive properties were Walkerville houses, which had a median price of $242,500.

That money today won’t even buy you Adelaide’s cheapest properties today – Kurralta Park units, which have a median price of $385,000.

ICU nurse Ellissa Noolan, 27, and her partner Ryan Litchfield, 30, who recently bought through a HomeStart loan in Happy Valley, South Australia. Pic: Dean Martin.

ICU nurse Ellissa Noolan, 27, and her partner Ryan Litchfield, 30, have recently bought in Happy Valley after a long search that involved her moving back home for a year to save for a deposit.

“We were renting and we were finding it hard to save for a deposit so we both moved in with my parents,” Ms Noolan said.

“Our concern was that house prices would just keep going up.

“We decided to go with HomeStart, who allowed us to borrow a bit more, which meant we could buy sooner – and get in before any further house price rises.

“We both have good jobs and did all we could to save – it’s definitely tough for first home buyers.”