Nine News tonight, using data from the DFA household research programme, highlighted the highly leveraged status of many households who have bought into the property market in the past couple of years.
Our research has shown that in some eastern suburbs within the Sydney area for example, many households would find even a small rise in mortgage interest rates would create significant financial headaches. The most exposed suburbs nationally are listed below.
The analysis is based on responses to our survey which asks whether households feel they could cope with covering the costs of an additional 1% on their mortgage. Given that many have mortgages of more than $500,000, even a small rise is enough to create problems, especially given static income. Note also that more affluent segments are more at risk.
Read more about our research in our recent blog posts.