Adelaide’s Property Market Faces Rising Pressures: New Reports Highlight Challenges for Renters and Buyers - Property Inc

Adelaide’s Property Market Faces Rising Pressures: New Reports Highlight Challenges for Renters and Buyers

The Adelaide property market is experiencing unprecedented pressures, according to the latest findings from PropTrack and the Australian Bureau of Statistics (ABS). The city’s rental vacancy rate has plummeted to a record low of 1.13 percent, the lowest among Australia’s capital cities, as detailed in the PropTrack’s Rental Vacancy Rates Report for June. This represents a sharp 24 percent decline since March 2020.

Anne Flaherty, a senior economist at PropTrack, expressed concerns about the ongoing situation, noting, “The chronic undersupply of rental properties is likely to continue over the next few years.” This scarcity has pushed rental prices up significantly, with Adelaide seeing an 11.8 percent increase in median advertised rents over the last year, now averaging $570 a week.

Simultaneously, new data from the ABS reveals that the average new mortgage size in Australia has reached an all-time high, with South Australia recording an average mortgage of $541,775—a nearly 16 percent increase since the Reserve Bank of Australia’s (RBA) rate hikes in April. This surge in loan sizes comes despite tighter borrowing capacities and higher interest rates, challenging many potential home buyers.

Sally Tindall, RateCity’s research director, commented on the resilience of the Australian property market. “Despite the rate hikes, the rise of Australia’s Teflon property market is dragging the average new loan size along for the ride,” she said. Tindall warns potential buyers about the risks of overextending their budgets, especially with possible further rate increases. “A mortgage is for up to 30 years—that’s a long time to be living off bread and water for someone who’s overstretched the budget at an overheated auction,” she advised.

These dual reports paint a challenging picture for Adelaide residents, both renters and home buyers, as they navigate a landscape of low supply and rising costs. With no immediate relief in sight, the city’s property market continues to test the limits of affordability and availability.

References:

https://www.indaily.com.au/business/property/2024/07/09/living-off-bread-and-water-adelaide-property-market-hits-dire-records 

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