Mortgage stress spiking in outer suburbs: DFA

The analysis identifies 12 mainly outer suburban areas of Sydney and Melbourne with high stress among owners and tenants
Mortgage stress spiking in outer suburbs: DFA
Jonathan ChancellorSeptember 19, 2021
Mortgage stress is spiking in outer suburban communities, according to analysis by Digital Finance Analytics. It shows between 50 and 70 per cent of renters and mortgagees in key outer suburban locations "are in trouble." The analysis identifies 12 mainly outer suburban areas of Sydney and Melbourne where over half of the households are financially stressed. Based on a rolling sample of 52,000 households, the survey shows the overall proportion of mortgage holders struggling with their finances rising from 33% in February last year to 41% in July this year. Close to 89 per cent of homeowners in Campbelltown were paying down mortgages they couldn’t afford, DFA suggest. At neighbouring Narellan and Mount Annan it was 80 per cent, with Liverpool at about 77 per cent. DFA had pinpointed Melbourne suburbs Fountain Gate, Narre Warren, Berwick and Hoppers Crossing has having high mortgage stress. True Savings director Pete Steel said the financial position of the households in mortgage stress was unsustainable. “Increasing prices are creating marginal aspirational purchasers,” Mr Steel told News Ltd papers. “They end up paying with only a 5 per cent deposit or they lean on the bank of mum and dad. Borrowers changing to part-time work or unemployment in lockdown was in part behind the stress, he noted.

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

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