Adelaide’s housing crisis is solvable
by Brendan Coates, Ashleigh Chang
It’s long been a virtue of Adelaide that housing has been more affordable here than in the rest of Australia. But no longer.
The numbers tell a stark story. House prices in Adelaide have surged by more than 90 per cent since the COVID pandemic. Adelaide now has less-affordable housing (relative to incomes) than Melbourne, a city more than three times its size. On that basis, Adelaide now ranks as having the sixth most expensive housing in the world.
There’s been no respite for renters either. Since 2020, rents on newly advertised properties have risen by at least 50 per cent. Poorer people are being squeezed by rental costs, forced to choose between housing and other necessities.
This crisis wasn’t inevitable — it’s the result of policy choices.
Adelaide has allowed less growth in its housing stock in its middle suburbs (those between 5km and 20km from the CBD) than any of Sydney, Melbourne, Brisbane, or Perth.
Instead of allowing gentle density increases in established, well-serviced neighbourhoods close to jobs, schools, and transport, Adelaide’s planning system has pushed new housing to the urban fringe.
In doing so, it has pushed people farther from work and family and has shut many younger South Australians out of economic opportunity.
Despite recent reforms, SA’s planning system still says ‘no’ to new housing in well-located areas by default, and ‘yes’ only by exception. More than 80 per cent of Adelaide’s residential land within 30km of the CBD is zoned for two storeys or fewer.
The impact is obvious: Adelaide is one of the least dense cities of its size in the world. If the inner 15km were as dense as Auckland, New Zealand — a city with a similar population — Adelaide would already have an extra 308,000 well-located homes.
The result is a vast ‘missing middle’: prime inner-city land, close to jobs and transport, with housing rising only one or two storeys.
It means few options for young families who want to buy a townhouse in the suburb they grew up in, or seniors downsizing to an apartment in their local neighbourhood.
To fix this, the South Australian government needs to increase what housing is allowed to be built in the established suburbs of Adelaide where house prices and rents are highest.
First, three-storey townhouses and apartments should be allowed on all residential-zoned land. These developments should not require a planning permit, just like many knock-down rebuild homes in South Australia already.
Victoria’s new Townhouse and Low-Rise Code provides a template for this reform.
Subdividing large family homes for townhouses is an easy way to boost density and allow more housing on scarce inner-city land without the need for lot amalgamations. Nearly two-thirds of all residential-zoned blocks in Adelaide are larger than 600sq m.
Second, housing developments of at least six storeys should be allowed around key transit hubs, as NSW and Victoria have begun to do.
And third, taller apartment buildings should be permitted in high-demand locations, including in and around the Adelaide CBD.
The good news is that Adelaide’s housing crisis is solvable. Allowing more homes where people want to live will mean more affordable housing and more vibrant communities. What are we waiting for?