The astonishing amount you need to earn to afford a home in SA

New data has revealed the income needed to buy a home in South Australia.

And it’s more than double what you needed five years ago.

An investigation by Canstar shows to buy a median-priced home in SA – one costing $827,000 – you need to earn $154,500.

To buy a median-priced unit – $570,000 – you need to earn $106,480.

In 2020, when the median house price was $482,000 you needed to earn just $64,469 in order to avoid mortgage stress.

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That represents an increase of $90,020.

It’s a similar story for units. In 2020, you needed to earn just $44,139 to buy a median-priced unit at $330,000 – some $20,000 less than you need now.

According to Payscale.com the average SA salary now is $74,000. In 2020 it was $67,844 – just $6156 less.

This shows the growth in income needed to buy has clearly outpaced wage growth during that period.

Canstar director of research Sally Tindall. Picture: Supplied

Canstar director of research Sally Tindall said prices had gone through the roof since Covid.

“It is astonishing to see just what kind of income is required to get a foot on the property ladder these days,” she said.

“My concern is that this is shutting people out.

“It creates this divide between those already in the property market and those that are struggling to land a foot on the property ladder.”

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She said part of what was fuelling the incredible rise in property prices was the burgeoning amount of equity upgraders had behind them to channel into their next purchases.

“It’s not an even playing field,” she said.

“Very few people have had the kind of pay rises needed to keep pace with the market. For most people, the only way they’ve kept up is because they already own property. Success breeds success.”

Professor Emma Baker of the University of Adelaide. Picture: Supplied

Professor Emma Baker from the University of Adelaide said it would be the worst possible outcome for a person to wedge themselves into a housing market they couldn’t afford to be in.

“Sometimes it’s just not the right time to buy into the market,” she said.

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“It’s so unfair that the current generation doesn’t have the ease that their grandparents had to just go in with a very average salary and get quite a nice house.”

“There’s never going to be one solution to housing affordability – it’s going to a whole pile of different things all kind of operating at the same time.”

University of Adelaide student Grace Hullah has concerns she might not ever be able to enter the housing market. Picture Mark Brake

University student Grace Hullah, 28, who is in her final year of a postgraduate law degree, said she finds the situation rather daunting.

“I sometimes I feel a bit hopeless about the whole situation because that is nowhere near my, or any of my friend’s salaries at the moment because we’re just starting our careers,” she said.

“Now is the time that we’re looking for the most stability, but we are at the most risk of not being able to afford anything, really.

“A lot of people I know have made peace with the fact that it might not ever happen.”

– with Aidan Devine

The post The astonishing amount you need to earn to afford a home in SA appeared first on realestate.com.au.