SA Investor Loan Lodgements Fall 39% as Loan Lodgements Drop Overall

This pattern is consistent with what realestate.com.au senior economist Eleanor Creagh described as a sixth consecutive month of price falls in September, with downward momentum strengthening in Adelaide, Brisbane and Perth after those markets had previously shown resilience. Creagh noted that "reduced buyer purchasing power remains the dominant pressure on prices, rather than large numbers of owners being forced to sell" — a distinction that matters for anyone trying to read whether this is a temporary credit squeeze or a deeper repricing.

Investor loan lodgements falling 39 per cent against a 10 per cent decline for first-home buyers in the same state signals the rate cycle is reshaping who can participate in the SA market — and who is choosing to sit it out.

For investors who remain active, the maths on every deal has tightened. Rising rates mean less of the rental return flows through to net cash position, which puts more weight on every available deduction — depreciation chief among them, since it is a non-cash expense that directly reduces taxable income without affecting actual cash flow.

Why Depreciation Matters More in a Tighter Credit Cycle

When borrowing capacity shrinks and fewer investors are entering the market, those who stay in — or who already hold property — face pressure to extract maximum value from the assets they have, rather than relying on capital growth or new acquisitions. A quantity surveyor-prepared depreciation schedule captures deductions on both the building's structural decline in value (Division 43) and eligible plant and equipment (Division 40), and for established SA investment properties bought before the current downturn, those schedules often haven't been updated to reflect renovations, new appliances or changed ATO depreciation rates.

Westpac's research cited in the same report found 38 per cent of South Australians are delaying buying or selling decisions because of interest rate concerns — a higher share than anywhere else in the country. That hesitancy cuts both ways for tax planning: investors sitting on established properties rather than selling into a falling market have every incentive to revisit their depreciation position now, rather than waiting for a sale that may not happen soon.

Practically, this means an investor holding an established South Australian rental property should check whether their original depreciation schedule still reflects the property's current condition. Renovations, kitchen upgrades or new flooring since purchase can all add deductible value that an outdated schedule misses entirely.

Background: How Depreciation Schedules Work

For the mechanics of what can be claimed, how schedules are prepared, and which assets qualify under Division 40 and Division 43, see our Property Depreciation Schedules Explained guide. It covers the difference between structural and plant-and-equipment deductions and how both interact with an investor's overall tax position.

The broader tax settings investors need to understand alongside depreciation — including how negative gearing, land tax and capital gains tax interact with a property's overall return — are set out in our Australian Property Tax Guide. For the full breakdown, see our Australian Property Tax Guide.

What This Means for SA Buyers and Investors

For investors weighing whether to buy into SA's softer market, the AFMS Group data offers a practical filter: couples could afford to buy in every outback SA suburb without mortgage stress, while Adelaide's Central and Hills region remained the state's toughest market, with couples able to afford just 55 per cent of its suburbs. That gap between regional affordability and metro constraint is likely to shape where investor capital does flow once lending conditions ease.

Anyone assessing financing options against this backdrop should also weigh how current mortgage settings compare across lenders — resources like REAStats track lender performance and market data that can inform those comparisons. With Creagh forecasting further price falls over coming months but a contained adjustment due to resilient employment and limited forced selling, investors have a window to review their existing portfolio's tax position before any recovery in lending volumes.

First-home buyers watching from the sidelines, meanwhile, are the cohort showing the smallest pullback in lodgements (down just 10 per cent), suggesting the affordability gap highlighted by the AFMS research is pushing some toward regional SA rather than out of the market altogether. For investors, the message is clearer: with new purchases harder to finance, the fastest lever available is often not a new deal but a sharper look at depreciation and deductions on what is already owned.