AHURI NEWS

AHURI research explores South Australian housing futures

Project extensively audits the State’s current housing assets and maps upcoming demand

6 August 2019

The number of South Australian households currently renting in the private market and facing high housing costs is predicted to grow by between 6 and 7.5 per cent over the next five years, rising to approximately 60,000 households by 2014, according to a new report commissioned by the South Australian Housing Authority and completed by AHURI’s Professional Services team and its university partner, the University of Adelaide.

The research is an extensive audit of the State’s current housing assets and maps upcoming demand in order to fully understand present and future housing needs. This knowledge will help the South Australian Government plan what housing and infrastructure resources will best be deployed in different regions across the state.

A key concern raised by the report is that housing costs are increasing, with median rents rising as a proportion of household income from 17.8 per cent in 2006 to 22.6 per cent in 2016 in Greater Adelaide and from 15.3 per cent to 18.4 per cent in the rest of South Australia. Overall housing costs are actually rising more quickly for private renters than owner occupiers in South Australia.

A key concern raised by the report is that housing costs are increasing, with median rents rising as a proportion of household income from 17.8 per cent in 2006 to 22.6 per cent in 2016 in Greater Adelaide and from 15.3 per cent to 18.4 per cent in the rest of South Australia.

One surprising finding in the report is that the ratio of median monthly mortgage repayment to household income has not risen noticeably either in Greater Adelaide or the rest of South Australia over the ten year period 2006–16, and in fact fell over the last five years. This may suggest that home ownership is becoming more restricted and that households on lower incomes are being forced into the different rental markets.

Table 1: Proportion of median housing costs to income for tenants and home buyers (2006, 2011 and 2016).

Greater Adelaide

Rest of South Australia

Housing cost

2006

2011

2016

2006

2011

2016

Median rent

17.8%

22.6%

22.6%

15.3%

17.5%

18.4%

Median mortgage

29.1%

34.8%

30.1%

27.5%

33.1%

28.4%

The research also shows that a quarter (25.3%) of South Australian households who were outright home owners in 2011 had either borrowed on their property (i.e. 12.3% had taken out mortgage on their property) or had become a tenant in the private rental market (2.6%) or other rental tenure. The reasons for a change to becoming a tenant may be due to a range of circumstances, including households accessing equity in their home due to either financial instability (employment or investment loss) or additional needs (health or disability); family or lifestyle purposes (travel, assisting children with home deposits); or changes in household compositions such as separations in which equity must be divided.

To read the full research findings, download the report from the AHURI research library.