South Australian buyers are having to make huge sacrifices to buy a property, as a new report reveals the average home loan in SA has hit a record high and recorded the second-highest increase in the nation over the past year.
Mortgage Choice data shows the average home loan across South Australia and the Northern Territory is $635,664.
This is up by 10.6 per cent over the past 12 month – annual growth only surpassed by Western Australia where the average loan size has increased by 11.8 per cent over the same period.
Loan values in Queensland increased by 9.7 per cent to $622,953; values in New South Wales and the ACT are up by 6.4 per cent to $752,914, and those in Victoria and Tasmania are up 4.6 per cent to $652,999.
Nationally, the average loan sits at $661,520 – up 8.4 per cent on last year.
Mortgage Choice CEO Anthony Waldron said the activity over the past quarter was likely to continue into the summer.
“Our latest consumer survey shows that current market conditions are encouraging a new generation of investors to enter the market, suggesting the demand for investment properties is likely to remain strong,” he said.
Anthony Waldron, Mortgage Choice CEO
Nationally, loan values increased by 8.4 per cent.
The data also showed the greatest increase in loan sizes was for those purchasing outright at 23.8 per cent, as opposed to those building, where values were up 17.8 per cent, and those refinancing.
These were up by 18.5 per cent.
Of those loans, demand for variable rate options were up by 25.1 per cent, while the number of those seeking fixed-rate loans had dropped by a whopping 35.3 per cent over the past year.
According to the report, over the September quarter, just two per cent of home loan submissions had a fixed component.
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Mr Waldron said borrowers were overwhelmingly opting for variable rate loan products.
“Even though we’re seeing some lenders offering fixed rates starting with a 4, most borrowers are sticking with variable-rate product as they wait for the anticipated future cash rate cuts,” he said.
When asked about how they chose a location for their investment property, 40 per cent of respondents said “wherever I can afford”, while 39 per cent sought the highest capital growth potential, 38 per cent sought a lower entry price, 33 per cent chased the highest rental yield and the other 33 per cent looked for strong tenant demand.
Loan values are up across SA and the NT.
Mr Waldron said despite this enthusiasm, investors risked losing out due to poor preparation. “Our survey reveals that among those looking to buy an investment property in the next 12 months, only 31 per cent of those looking to buy an investment property have worked out their borrowing power, and only 32 per cent have set a budget and 40 per cent have researched recent sales,” he said.
“In a competitive market, a lack of preparation can easily cost you the property you want.”
Across the generations, when it comes to making sacrifices to buy a property, Baby Boomers ate out less frequently, and cut back on entertainment expenses like movies and concerts.
Millenials cut down on non-essential purchases like clothing and gadgets, and delayed or cancelled holidays.
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Gen Zers cancelled the most subscription services and used savings or emergency funds to cover repayments, while Millenials were most generation that sought the most financial assistance from family or friends.
Of respondents, 13 per cent of Gen Zers took on a housemate, and 17 per cent sold their home and downsized.
Interest rates have fallen, but most borrowers haven’t reviewed their home loan.
Despite this, Mr Waldron said 35 per cent of borrowers had not reviewed their home loan in the last year.
“Over the last 12 months, the Reserve Bank has reduced the cash rate by a total of 75 basis points,” he said.
“This presents a huge opportunity for borrowers to seek out a more competitive rate.
“I encourage anyone who hasn’t reviewed their loan in a year or more to chat to their mortgage broker to see if they could start 2026 with a more competitive home loan.”
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