Adelaide house prices hit $400,000 – Concerns of bubble as prices out strip wages

The Adelaide Advertiser today published figures from the Valuer-General showing the medium house price in Adelaide is now $405,000.

The Advertiser expresses concern of its sustainability, writing “Property owners have benefited from the 243 per cent increase in housing prices over the past 10 years, but those seeking to enter the market have fallen further behind as wages have increased only 35.5 per cent over the same period.”

Historically, House prices normally only rise in line with wage growth and inflation. If it didn’t, the power of compounding would see future generations priced out the market, and worst still unable to make basic interest only payments.

It has only been the last ten years, that this have deviated, spelling disaster for the rest of the economy such as retail and small business as more and more money is required from household budgets to support spiralling housing expenses.

» Adelaide homes crack the $400,000 mark – The Adelaide Advertiser, 8th April 2010.