Latest On Victorian Mortgage Stress

Today’s coverage in the Herald Sun looking at sensitivity analysis of mortgage stress in Victorian households received significant attention. Several tv news programmes tonight will continue the coverage.

Here is a summary of the current levels of mortgage stress – around 300,000 households are feeling the pain of higher mortgage rates, flat incomes and rising costs of living. Not a good formula.

As well as those in the mortgage belt, some in the more affluent areas are also in difficulty. We modelled the impact of a 2% rate rise – the number of households in pain would double.

Note also that investment property holders are also under the gun, thanks to the recent rounds of mortgage repricing, despite flat rental yields.

This could get rather nasty. The best outcome would be a period of stagnant prices, the more likely is a correction as the chickens come home to roost!

Author: Martin North

Martin North is the Principal of Digital Finance Analytics