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Adelaide’s cost of living crisis to get worse with safe lending repeal

As the sun sets on South Australia's dream of affordable living, the financially vulnerable need all the protection they can get.

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Last updated: 19 February 2021
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Fact-checked

Checked for accuracy by our qualified fact-checkers and verifiers. Find out more about fact-checking at CHOICE.

Reading Adelaide Mum Kirsty Rich's story about struggling with more than 150 rental rejections earlier this month was shocking, but not surprising, given what's happened across Australia during the COVID-19 crisis.

Adelaide, long known for its high quality of life and more affordable cost of living, has piqued the interest of Melburnians and Sydneysiders, especially now that distance is much less of a barrier in the workplace than it used to be.

For South Australia, this renewed interest in the state brings a lot of benefits. But unfortunately for the state's capital, it also means a housing market going into overdrive, rents skyrocketing and the once famed affordability of South Australia coming under threat.

Median Adelaide house price tops half a million

The median house price in Adelaide has now reached a record high of $510,000, squeezing first home owners even more and leaving parents like Kirsty faced with a tough battle in the rental market.

Property developer Theo Maras told The Advertiser "for SA to progress and for us to engage people to stay here, we need low-cost housing and low rental, and it is a real problem".

When even property developers admit there's a problem with housing affordability, you know something's wrong.

For SA to progress and for us to engage people to stay here, we need low-cost housing and low rental, and it is a real problem

Theo Maras, SA property developer

COVID-19 is the catalyst for much of this change, but the public health crisis masks a bigger issue that's been underlying the problem for a long time.

The banking royal commission may feel like a long time ago. But it was only two years ago that the commission handed down its final report, finding the big banks guilty of breaching the law in a number of areas and recklessly pushing loans on families and communities who were simply looking for security.

'A disaster in waiting'

The report's first recommendation told the federal government to keep safe lending laws – the laws that stop the banks from taking advantage of Australians with unsafe loans. For the housing market, unsafe loans mean more people fighting for homes and more financial and mortgage stress.

The federal government, under pressure from the banking lobby, wants to scrap safe lending laws, with proposed laws before the Senate right now. For South Australia, that's a disaster in waiting.

South Australians: tough customers

The good news is that South Australia has a strong history of standing up to the federal government and the other states when it comes to consumer protection. 

Whether it's the state government pushing the federal government to improve payday lending laws or SA's federal senators cracking down on predatory debt companies, South Australians have a long history of doing what's right by the community.

If South Australia wants to keep its mantle as the affordable state with world-class living standards, it can't afford to lose safe lending laws. Losing safe lending laws means more financial distress for South Australians as the banks treat Adelaide as their new cash cow.

Alan Kirkland is the CEO of consumer advocacy group CHOICE.

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