Many buyers focus on one number: the purchase price. They say, “Can I buy a house at this price today? ” and if the numbers seem to work in the short term, they go ahead. But real estate agents think differently. Good real estate agents look past the contract moment and ask a deeper question: how real estate agents judge if a home is affordable long term is not just about house prices and property prices today but about ongoing costs, mortgage repayments, council rates, interest rates, and even what will happen to resale value in the future.
In other words, we are not only helping you buy a house. We are helping you protect your life after the property purchase.
Below, we’ll walk through how real estate agents assess long-term affordability, why housing affordability in the current property market is about more than the deposit, and what first home buyers and other home buyers in South Australia and across Australia should consider before taking on a home loan that secretly stretches them.
How Real Estate Agents Judge If A Home Is Affordable Long Term Goes Beyond The Purchase Price
The first conversation most potential buyers have is, “What can I borrow? ” But that is only the first step, not the full story.
When real estate agents think about how real estate agents judge if a home is affordable long-term, we look at:
- The purchase price in the context of recent sales in that local market, so you know if you’re paying fair value or paying an emotional premium.
- The true loan amount, including stamp duty, fees, and sometimes lender’s mortgage insurance if the deposit is small.
- What those mortgage repayments will look like if interest rates rise, not just today’s rate.
- Your ongoing costs to actually live there, not just to get the keys.
This matters because buying at the very edge of what you can “technically” afford can turn a dream of home ownership into daily financial pressure.
Ongoing Costs Matter As Much As The Mortgage Repayments
A lot of first home buyers in the Australian property market focus on the home loan and forget the ongoing costs that begin the moment settlement happens.
Those ongoing costs usually include:
- Council rates
- Utilities and service charges
- Building insurance and contents insurance
- Maintenance costs, especially if you’ve bought a fixer-upper instead of a newer build
- Strata fees, if you’re in a unit or townhouse
- Higher transport costs if you’ve traded location for price and now rely on a car instead of public transport
- Property taxes and state charges (these vary by state and by property type)
Real estate agents often sit with buyers and go line by line through these ongoing costs. It’s not exciting, but it’s honest. For many Australians, a home is technically “affordable housing” only at the moment of purchase but less affordable once all the hidden bills start landing.
If you can only just make the mortgage repayments, but you have nothing left for maintenance, you are not comfortably affording that home. You are surviving it. That matters for long-term affordability.
Interest Rates, Reserve Bank Decisions, And Your Future Repayments
We also look at interest rates, not just where they sit today, but where they could move. The Reserve Bank sets the tone for the cost of borrowing in Australia, and when interest rates rise, your mortgage repayments rise. If your loan amount is already stretched, even a small rate movement can claim a significant portion of your income.
When we assess how real estate agents judge if a home is affordable long-term, we ask:
- Can this buyer still pay if interest rates rise by 1 to 2 percentage points?
- Will they have to give up essentials to meet the mortgage?
- Are they relying on help from a family member every month to stay afloat?
This is not scare talk. It’s real talk. We see what happens when buyers jump at a “now or never” property purchase without thinking about how the Australian economy and the interest rate cycle can shift in 12 to 24 months. Housing affordability is not just what you can pay right now. It’s what you can keep paying without losing sleep.
Lenders Mortgage Insurance And The Cost Of A Small Deposit
For many first home buyers and first home buyers in South Australia or other states like New South Wales or Western Australia, the deposit is the hardest part. To get in sooner, a lot of buyers accept a smaller deposit, which can trigger lenders’ mortgage insurance.
Lender’s mortgage insurance (LMI) is a premium paid to protect the lender, not you. It is usually added when your deposit is below a certain amount (often below 20 percent of the purchase price). It helps you get the loan approved, but it also increases the total cost you’re paying to enter the property market.
We help buyers think about:
- Is paying LMI today a smarter path than spending two more years renting and saving?
- Or, by waiting and saving a larger lump sum deposit, could you reduce your total loan amount enough to get lower mortgage repayments for the next 25 to 30 years?
Sometimes the fastest way to become a homeowner is not the most sustainable way to stay a homeowner.
Location, Transport and Lifestyle Costs After Purchase
When we’re guiding buyers through how real estate agents judge if a home is affordable long term, we talk about suburb choice and location choice in very direct terms.
Here’s why:
- If you buy in a cheaper outer area to get “more house”, what does that do to your daily cost of living?
- Are you now driving everywhere instead of using public transport? Fuel, tolls, parking and car maintenance are real costs.
- Can you access work easily, or will you spend two hours a day travelling from one edge of the capital city to the other? Time is also a cost.
- Does the area have basic services like childcare, schools, shops, health care, and decent internet?
- Will you end up paying more just to access the basics, because they are not close?
Some buyers stretch financially to get a “big house at a lower price”, then realise the area is not sustainable for their life. That house becomes a burden. In extreme cases, they sell within a few years, often at the wrong time in the market, and absorb a loss.
We are trying to stop that.
The Question Of Resale Value And Exit Strategy
A smart agent is not only helping you buy. A smart agent is already thinking about how easily you could sell if you ever needed to.
When we consider how real estate agents judge if a home is affordable long term, we consider resale potential:
- Is this a property with broad appeal in the local market, or is it so specific that only a narrow type of buyer will want it later?
- Are you buying something with obvious issues (traffic noise, odd layout, structural work needed, flood risk) that future buyers will use to drive down the price?
- Are you entering an area in South Australia where median prices have a solid record of holding value, or are you buying into a pocket that dips whenever the economy gets soft?
It sounds harsh, but thinking about an exit strategy before you sign the contract protects you. You want a property you can sell without panic, even if life changes.
When an “Affordable House” Is Actually a Fixer-Upper in Disguise
Another trap we see in the current market: the fixer-upper that looks cheap compared to other property prices in the suburb. Many Australians say, “We’ll renovate over time.” But the cost of that renovation still needs to come from somewhere.
We ask buyers:
- Do you have spare savings after stamp duty, moving costs and setup costs?
- Do you understand how much basic structural work can cost today in Australia?
- Are you confident the work you plan is legal under local council rules and building approval process requirements?
- Will you need to borrow more for the renovation later, and can you handle those repayments if interest rates rise again?
If the only way to make the home liveable is to spend thousands immediately, then the real purchase price is not the contract number. The real purchase price is the contract number plus urgent repair money.
That affects affordability.
Income Stability, Life Planning And The “Significant Portion” Test
There’s a very simple test we sometimes use with buyers. We call it the significant portion test.
We ask:
- After the mortgage, council rates, insurance and essential running costs are paid, how much income is left?
- Is that leftover amount still enough for food, transport, health costs, and a normal life without panic?
- Could you still survive if one income in the household dropped temporarily — for example, parental leave, job change, or caring for a family member?
If the home absorbs so much income that you are counting every dollar, that may not be affordable housing in any meaningful sense, even if the bank says yes to the loan.
Remember: the bank’s approval is not a promise that the lifestyle is realistic. Banks care about risk to the lender. Real estate agents, when we are doing our job well, care about risk to you.
Investment Properties And Long-Term Holding Costs
For buyers looking at investment properties, especially in markets under housing crisis pressure, we don’t just talk about rental income. We also talk about:
- Vacancy risk – how long might the property sit empty?
- Repairs demanded by tenants – especially in older housing stock.
- Property taxes, insurance and council rates that eat into rental income.
- Whether the local market will keep attracting renters, or whether people are leaving the area for better work or better public transport.
If the rental return doesn’t comfortably cover the costs of holding the property, it’s not actually “paying for itself”, no matter what the sales pitch said.
Again, this is about future safety, not just short-term ownership.
Final Thoughts: Make Sure You Can Comfortably Afford The Life, Not Just The House
At the end of the day, how real estate agents judge if a home is affordable long-term is a mix of numbers, lifestyle, and realism. We look at house prices and property prices in the current market. We factor in lenders’ mortgage insurance, council rates, stamp duty, mortgage repayments and ongoing costs. We stress test the loan for higher interest rates. We think about resale. We ask how this choice will feel not just on day one, but in five years.
If you’re a first-time home buyer, a returning buyer, or a potential buyer planning your next property purchase in South Australia, you don’t have to guess. Talk to the Best Local Real Estate Agents. We’ll sit with you, look at your financial situation honestly, compare local market trends and recent sales, and help you decide if this is a home you can truly afford to hold, live in and enjoy—not just today, but for the long term.
