Buying a house in South Australia costs a considerable amount of money and it’s important you don’t get into financial trouble when you do it. A failure to keep up repayments on the property may result in you losing it, so the implications are very severe.
Before you commit yourself to anything, you need to seriously consider the costs involved in buying a house in South Australia. These are not only the upfront costs associated with the purchase but also ongoing costs that may vary over time and will continue while you live there. It’s important that you set out a budget and that you stick to it, so you avoid financial problems.
The Up-front Cost of Buying a House in South Australia
When buying a house, it’s extremely unlikely you’ll be paying cash but will instead require a loan to fund the purchase. Securing that loan is essential for you to be able to sign a contract for a property, so you ideally need to obtain finance pre-approval that will help establish you as a credible buyer. Mortgages and home loans have different features and the ones you choose will affect the amount you have to repay each month:
- The most common type of loan repays, over a period of 25 or 30 years, the principal (the amount borrowed) and the interest added. Interest-only loans pay off the interest but not the principal, so have lower repayment amounts but require the principal to be repaid at some point.
- Fixed-interest loans have the interest rate fixed for a set period (typically three years) so you have the certainty that the amount you repay won’t vary over that time, but there may be a fee if you cancel before the end of the period. Variable rate loans alter the rate with market conditions so repayments can go up or down, although the terms may be more flexible and they’re more easily cancelled. You can sometimes have a split loan with fixed and variable elements.
- Offset loans are linked to savings accounts, so you only pay interest on the net balance between the two. These encourage savings and reduce interest costs.
- Redraw loans allow extra repayments to be made and access to funds.
A loan consultant or mortgage broker will advise which is best for you and their fee is often covered by the lender. Once you organise your mortgage, you’ll know what your monthly repayments will be, at least at the start. You’ll also know the deposit you’re expected to pay on the property, which is likely to be your largest upfront cost.
In general, the upfront cost of buying a house in South Australia is likely to comprise:
- The deposit, which can be anything from 2% to 20% of the purchase price. A bigger deposit demonstrates you have saved and will make loan approval more likely. However, saving a full 20% deposit can take many years on an average income, so a government-backed guarantee, such as the First Home Guarantee, can provide a low deposit alternative.
- Lender’s mortgage insurance may be required where a 20% deposit is not payable and can cost several thousand dollars, unless you can avoid it through a government-backed guarantee.
- Stamp duty and other government charges are payable and vary depending on the value of your property. Note that eligible first home buyers purchasing or building a new home now pay no stamp duty (see below).
- Loan title office fees and title search fees.
- Building and pest inspections are essential since you need to be sure the property is sound and free from infestations. Costs of up to around $800 are likely.
- Loan establishment fees, legal costs and conveyancing fees are applicable and can add anything up to $3,000.
- Moving costs, which will vary depending on what you have to move and how far.
Government help for first home buyers
If you’re a first home buyer, two forms of government help can significantly reduce these upfront costs.
The First Home Owner Grant is a one-off payment of up to $15,000 for eligible buyers building or purchasing a new home in South Australia. For contracts entered into on or after 6 June 2024, there is no longer any property value cap on the grant, so it is available regardless of the price of the new property.
On top of this, South Australia has abolished stamp duty for eligible first home buyers who build or buy a new home. This means $0 stamp duty on a new home or vacant land, again with no value cap, for contracts signed on or after 6 June 2024. On a $600,000 new home, that stamp duty saving is in the region of $27,000, which combined with the grant can put more than $40,000 back in your pocket. These concessions apply to new homes rather than established dwellings, so the type of property you choose has a real financial impact.
One important eligibility point to be aware of: for contracts signed on or after 13 February 2025, you will not qualify for the First Home Owner Grant if you or your spouse or partner have ever owned residential property in Australia, even if you never lived in it. Earlier contracts were subject to different rules. Because eligibility criteria and thresholds change from time to time, it’s always worth confirming your specific situation before you commit.
The First Home Guarantee
If saving a 20% deposit is out of reach, the federal First Home Guarantee (part of the Home Guarantee Scheme, administered by Housing Australia) can help. Eligible first home buyers can purchase with a deposit as low as 5% without paying lender’s mortgage insurance, because the government guarantees part of the loan.
From 1 October 2025, the scheme was expanded significantly. The income caps were removed, the annual limit on the number of places was scrapped, and the property price caps were lifted. In South Australia, the cap is now $900,000 for Adelaide and $500,000 for the rest of the state. Eligible single parents and guardians may instead be able to use the Family Home Guarantee with a deposit as low as 2%. You still need to cover stamp duty, legal and conveyancing fees and other costs on top of the deposit, and normal lender checks on your borrowing capacity still apply.
Putting the numbers together
For a $600,000 property, a 20% deposit will require $120,000, while lender’s mortgage insurance may be payable if this cannot be achieved and a government-backed guarantee is not available. For an established home, other charges such as stamp duty, inspections and conveyancing can add many thousands of dollars on top. For an eligible new-home purchase, the picture is very different, because the stamp duty component is removed and the $15,000 grant may apply. Either way, you need to ensure you have the money available before you start.
If the figures show you can’t really afford your first choice of home, you may have to make compromises. Look for a property in a cheaper area and consider a smaller house. An existing house may also not have as many fit-out costs as a new home, although repairs will be more common. Keep in mind, though, that the grant and stamp duty concessions currently apply only to new homes, which is worth factoring into any comparison between new and established properties.
On-going Costs of Buying a House in South Australia
Once you’ve bought the property and moved in, you will have costs that recur every month. The biggest of these will likely be the mortgage repayment and it’s essential you are able to pay this. Failure to do so can eventually lead to repossession of your home and cause an adverse effect on your credit rating, so repayment is a priority.
In addition to the mortgage repayment, you’ll also have:
- Insurance for the property
- Council and strata fees if buying a townhouse or unit
- Emergency services levy
- Food, transport and general living expenses
- Maintenance costs, which will increase over time
- Electricity and gas costs
- Internet costs
When budgeting for living expenses, add in a contingency amount because costs can rise unexpectedly, particularly your mortgage repayments if rates go up on a variable loan, and you don’t want to be caught out. Also, add in an amount for holidays and recreation if possible, because ideally you want a life outside your new home.
Buying a new house is exciting but it can turn into a nightmare if you find out too late that you can’t afford it. So budget carefully for both upfront and ongoing costs, add in amounts for safety, and then stick to your budget where possible. Then it truly will be your dream home.
Blackwood & Belair Conveyancing helps navigate the complexities of buying a house in South Australia. Established in 1973, our expert team brings over 40 years of experience to ensure your conveyancing process is smooth and stress-free.
This article is general information only and does not take account of your personal circumstances. It is not a substitute for tailored legal or financial advice. Grant, stamp duty and scheme settings can change over time, so please confirm current details with RevenueSA and Housing Australia, or contact our team, before making any decisions.