Continuing our series covering the latest Digital Finance Analytics mortgage stress analysis, today we look at the Sydney region. Despite low interest rates, many households are in mortgage stress. Here is a map showing the number of households we assess as being in mortgage stress by post code. There are more households in western Sydney in difficulty.
Here is the list of the top 10 post codes. The post code with the largest number of households in mortgage stress currently is 2650, Turvey Park. Of note is the household segment most represented here – namely mature, older households. In fact as you go down the top ten list, the striking observation is that various segments are represented, including young families, battlers, and older households.
When we examine the drivers of stress, three elements are working in combination to create the issues, despite ultra low interest rates. These households have high levels of debt, relative to income (large mortgages and credit card debt); their incomes are static or falling in real terms and child care costs are high, and increasing, compounding the high costs of living. We also note that a disproportionate number of households have loans dating from 2012-13, when lending criteria were more generous, and as a result, they have higher than average loan to value and loan to income ratios. Many would fail now to get the loan they have, based on current criteria and some are finding refinancing to cheaper loans difficult.
Next time we will look at Brisbane.