‘Living off bread and water’: Adelaide property market hits dire records
Adelaide had the lowest rental vacancy rate of any capital city in June, as mortgage loans reach record highs.
PropTrack’s Rental Vacancy Rates Report for June, released today, showed Adelaide’s rental vacancy rate was 1.13 per cent, the lowest of any capital city in the country and a 24 per cent decrease from March 2020.
PropTrack senior economist Anne Flaherty said the “chronic undersupply of rental properties is likely to continue over the next few years”.
South Australia has also reached record high new loan sizes, as the country records the highest average new owner-occupier mortgage in ABS history. ABS lending indicator data, released yesterday for May 2024, showed the average new mortgage in Australia was $626,055.
South Australia’s average was $541,775, a record high for the state, and a nearly 16 per cent increase since RBA hikes in April.
RateCity research director Sally Tindall said “despite the rate hikes” the rise of Australia’s Teflon property market was “dragging the average new loan size along for the ride”.
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“Over the last two years, buyers have seen their maximum borrowing capacity plummet, in some cases by hundreds of thousands of dollars, as a result of the RBA hikes, and yet the average new loan size has hit a new record high,” Tindall said.
“If you’re thinking about taking out a new mortgage, make sure you factor in the possibility of further rate hikes and don’t even entertain the idea of rate cuts when doing these calculations.
“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.”
The data comes after last week PropTrack released its Market Insight Report, finding rental prices in Adelaide rose by 11.8 per cent over the last financial year. The median advertised rent on dwellings in Adelaide was $570 a week.
This increase was the second largest of all Australian capital cities, second only to Perth where prices rose by 18.2 per cent.
