Both the Property Council of Australia and Shelter SA have renewed calls for action on housing in the state after news that Adelaide’s median home value climbed past Melbourne’s in August for the first time since CoreLogic started keeping records 40 years ago.

The Adelaide median house price is now $790,800, compared to Melbourne’s $776,044.

The new CoreLogic data also revealed national house price growth of 0.5 per cent in August, while Adelaide saw gains of 1.4 per cent in the month.

SA executive director of the Property Council of Australia Bruce Djite said the continued growth of Adelaide’s median house price “reflects the need for the government to do much more to incentivise an increase in housing supply”.

“These median house price statistics, coupled with our exceptionally low rental vacancy rate, reflects how far behind the curve we are in addressing the housing crisis,” he said.

The new CoreLogic data follows the release of a report in August from PropTrack which found Adelaide’s rental vacancy rate dropped to 1.06 per cent in July; a 0.08 per cent decrease from June and a 29 per cent decrease from March 2020.

Only Darwin has a tighter rental vacancy rate than Adelaide, at 1.03 per cent.

Djite said the CoreLogic figures mean Adelaide can no longer boast its status as an “affordable” place to buy.

“South Australia’s attractive competitive advantage of being relatively affordable is well and truly eroded,” Djite said.

“To address affordability and access to housing, we need to be more welcoming of increased density, see faster rezonings, development approvals and enabling infrastructure delivery.

“Most importantly we need to depoliticise development and increase certainty. If we fail to do the aforementioned then the housing crisis is destined to get much worse.”

Shelter SA executive director Alice Clark said the median house price of $790,800 puts home ownership out of reach for both low-income and average-income households.

“Only about a quarter of households can afford to buy houses at that price,” Clark said.

“The government’s focus is on land releases and building market-sale housing, but there’s no plan for that 75 per cent of people who will never afford a house at this price.

“Building our way out of the housing crisis is just not a reality for this huge section of the population who are nowhere near those income levels.”

With the median house price climbing alongside ever-tightening rental vacancies, Clark said there was “no end in sight” for low-income households.

“Four years ago, before the pandemic, for low-income households, there was nothing affordable in the private rental market,” she said.

“Rents have increased so significantly that there’s a bigger group of those people now as well. Our members who provide homelessness services are completely overwhelmed with people coming to them for assistance.

“There’s no end in sight for those people.”

She said more should be done to increase the stock of social housing.

“That’s where we really need to see an uplift if we’re actually to solve the housing crisis.”

Housing and Urban Development Minister Nick Champion said the rising median house price was a “symptom of a strong economy with limited supply of housing”, noting South Australia’s economy was ranked the top in the nation for three consecutive quarters by CommSec.

“That’s why the Malinauskas Labor government developed the housing roadmap, a bold plan with 74 initiatives to build more homes, faster,” Champion said.

“This includes an unprecedented $1.5 billion to expand the water and sewer network which has the potential to unlock 40,000 new allotments.”

The state government also announced today that SA was leading the nation in terms of residential construction activity.

The government pointed to Australian Bureau of Statistics data that showed the value of residential construction work grew by 7.5 per cent to $1.1 billion in the June quarter.

Further, SA also recorded the strongest growth nationally for the construction of apartments and units, growing by 10.4 per cent in the quarter.

“The key to addressing the housing crisis is building more homes faster and this government is leading by example,” Champion said.