Adelaide named one of the world’s most unaffordable housing markets in new report

June 13, 2024June 13, 2024 Admin

Adelaide is one of the least affordable housing market in the developed world, with a new report ranking the City of Churches among the 10 least affordable cities globally.

Adelaide has been declared one of the least affordable housing market in the English-speaking world, with the City of Churches one of three Australian capitals ranked among the 10 most unaffordable global cities.

The annual Demographia study ranked Sydney the second most unaffordable city to buy a home in the world – the 15th time in 16 years the Harbour City has been ranked in the global top three.

Demographia produced the rankings by measuring how property prices compared to incomes across global cities.

Sydney was deemed “impossibly unaffordable” with prices 13.8 times the average income, according to Demographia’s newly released International Housing Affordability report.

Only Hong Kong had a worse ratio of prices to incomes.

Melbourne was ranked the seventh least affordable market in the world, with prices 9.8 times the average income.

Adelaide ranked at number nine, with home prices 9.7 times the average income, making the city “impossibly unaffordable”, according to the report.

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Adelaide has been named one of the world’s least affordable cities. Picture: Stephen Brookes

Brisbane was ranked joint 13th, on par with Greater London and Miami.

Latest market data shows the average house across greater Adelaide now costs $742,000, up 12.4 per cent to figures record 12 months ago and 57.5 per cent pre covid.

Unit prices have also climbed by 13.8 per cent over the past year and 41.4 per cent over the past five years, up to a new average of $495,000.

Meanwhile, the average weekly rent for a house now sits at $575 and $480 for a unit.

This means at least 50 per cent of a $789 a week income is spent on rent or the equivalent of weekly mortgage repayments.

Anglicare Australia executive director, Kasy Chambers, said the state’s housing crisis was officially “the worst it’s ever been”.

“This is not hyperbole. It is Australia’s new normal,” he said.

“Results have never been so bad for a person on the minimum wage, with affordability halving over the last year.

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Across Australia as a whole, prices were an average 9.7 times typical incomes, which was higher than in the US, UK, Canada, Ireland and New Zealand.

Demographia noted that Australian housing affordability had deteriorated markedly in recent years, with the ratio of prices to incomes at 6.9 back in 2019.

All five of Australia’s major housing markets have been severely unaffordable since the early 2000s or before, the report said.

Australia was also one of the countries with the biggest disparity between the most and least affordable markets, indicating rising income inequality.

The report said there had been a strong association between severely unaffordable housing and net domestic migration in many countries.

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Deteriorating housing affordability was eroding the middle-class, the report added.

“For decades in the high-income world, a hallmark of a strong middle class was the widespread ability to own a home – house prices generally rose in line with household incomes,” it said.

“As late as the 1990s, house prices were three times or less than household incomes in most, if not all, the housing markets of New Zealand, Canada, the US, Australia, the UK and Ireland.

“However, this nexus has been broken in many markets, with house prices escalating far above household incomes (measured by the price to income ratio, or “median multiple”).

“Land prices are now much more expensive, and house prices relative to household incomes have tripled in markets such as San Francisco, Sydney, Vancouver, Honolulu and Auckland.”