Mortgage stress is a “cancer”, says Wizard Home Loan’s Mark Bouris, and it’s moving from the battler suburbs to the affluent people in places like Bondi. A joint survey by Wizard Home Loans and Fujitsu Consulting has found that 784,000 of Australia’s 8 million households suffer from some form of mortgage stress, a rise of 15% for the month of May. This figure is likely to reach 923,000 by September, even without further interest rate rises.
The survey questioned 26,000 Australians, and asked them whether they had changed their general spending habits to make mortgage repayments and if they had missed a mortgage repayment. If they said they had to reorganise their spending, then that’s classified as mild mortgage stress, and if they’re falling behind in repayments, thinking of selling up or facing default proceedings then that’s severe mortgage stress.
Real estate agents I’ve spoken to who work in the upper end of the market have often said that the interest rate rises haven’t affected their areas. That might be starting to change:
“Normally those people would be fine but they were relying on the stockmarket and of course the stockmarket has taken a bath so suddenly they don’t have the income from their investments.”
– Martin North, Fujitsu Consulting
When the people living in the top end suburbs need to downsize, you know things are serious. I’ll have to have a chat with some real estate agents in the wealthy areas of Brisbane to see if things are now starting to hit hard here.
If you’re finding it tough to make ends meet at the moment, you’ll find a few hints at another Real Estate Daily article, “How to avoid mortgage stress”.