New data reveals a growing disparity between income levels and housing affordability in South Australia, highlighting the increasing challenge for prospective homebuyers. According to recent research analyzing the income required to purchase a median-priced home with a 20 percent deposit, a single buyer now needs to earn $167,424 before tax—a rise of $27,646 compared to the previous year. Last year, the average pre-tax income needed was $139,778.

For those aiming to buy a unit, the income threshold has also increased, albeit to a slightly lesser extent. The average pre-tax income necessary now stands at $114,741, up $17,656 from last year. These figures outpace typical wage growth, which ranges between 3.2 and 3.7 percent annually for the average Australian salary of $108,352. This translates to an annual pay increase of approximately $3,467 to $4,009—considerably less than the rise in income required to qualify for a mortgage.

Experts attribute this widening gap primarily to elevated interest rates, which have disrupted the traditional relationship between property prices and affordability. Canstar researcher Josh Sale explained that despite falling property prices in some areas, the income needed to purchase a home has increased. This paradox stems from rising home loan interest rates, which climbed from an average of 5.50 percent in late 2025 to 6.49 percent in 2026, alongside mandatory lending buffers of 3.0 percentage points imposed by banks.

These factors have significantly eroded borrowers’ capacity to service loans, leading to what Sale described as a “double squeeze.” Declining borrowing power means that buyers must earn substantially more just to qualify for financing—even on cheaper properties—while ongoing inflation continues to challenge their ability to save for deposits.

The dynamic of the market, Sale noted, has shifted away from focusing solely on property prices to emphasizing debt serviceability and income strength as key determinants of affordability. The required income to purchase the average home in nearly every Australian capital city has risen over the past year despite declines in property prices across much of the market.

Supporting this view, a survey conducted by Finder of over 1,000 Australians found that 66 percent favor efforts to reduce house prices. Finder finance expert Sarah Megginson cautioned, however, that lower prices do not automatically translate into greater affordability. She emphasized that in addition to home prices, buyers must contend with securing sufficient deposits, managing loan repayments, and covering other ongoing costs associated with homeownership.

Together, the data and expert commentary underline the increasing challenges facing prospective homebuyers in South Australia and more broadly across Australia, as rising interest rates and living costs outpace wage growth and limit access to the property market.