Report suggests Adelaide houses "Good Value."
Charlotte Lemmon |
16 August 2017
Rising house prices are fuelling millennials’ concerns over never breaking into the housing market.
However, mortgage and rental affordability has increased in South Australia from 2015-2016, the latest Real Estate Institute of Australia (REIA) and Adelaide Bank Housing Affordability Report shows.
The report’s latest affordability figure for the South Australian housing market is 25.5 per cent of a $1,535 median weekly family income, better than the 32.4 per cent recorded in December 2015.
REIA President Malcom Gunning said the Adelaide housing market now represents good value.
“The Adelaide market has strengthened to the point where their growth is only 4-5 per cent for the year, well below Sydney and Melbourne house prices,” he said.
South Australia’s average weekly housing cost of $366 for owners with a mortgage, ranks the second lowest nationwide, according to the Australia Bureau of Statistics.
This sits well below Melbourne at $437 and Sydney at $465.
Mr Gunning said millennials’ high expectations for their first home is a contributing factor to concerns surrounding housing affordability.
“When looking at properties treat them as stepping stones. You may first live in houses and areas you may not want to end up in for the long term,” he said.
“It’s a journey. Unfortunately, no one can travel first class straight off. Once you are on the property ladder you can move your way through relatively quickly.”
University student Joe Foster, who also works part time, says even treating properties as “stepping stones” is difficult for millennials, as the process of entering the housing market altogether is a “hard task”.
“I’m renting a house now while I’m trying to save to buy a house but it’s going to take me a long time before I break into the market, and that’s just for a basic house or apartment,” he said.
Dean of Research and Innovation at University of South Australia’s Business School, Andrew Beer, said Adelaide house prices are more affordable.
“Adelaide house prices are good value in the market compared to Melbourne and Sydney where house prices are heavily inflated.”
Despite these “good value” housing prices, Prof Beer says that the prices of houses “still represent a significant burden” for millennials looking to buy their first property.
Mr Foster said the South Australian Government’s $15,000 First Home Buyers Grant was a big step forward for people wanting to buy a home.
“The grant definitely helps in the process of buying a home, but it only includes homes that have never been lived in before or house and land packages.
“These types of first homes aren’t always the most ideal for a millennial who could be juggling university and part-time work.
“The inclusion of all homes instead would benefit so many young South Australians,” Mr Foster said.
Mr Beer agrees, saying the housing market needs to change.
“We need a housing system where housing is more affordable.”