Our household debt headache runs deepers than mortgages alone
Queensland’s hidden debt hotspots have been exposed, with new data revealing families in suburbs across the state are grappling with total loan burdens exceeding $1 million per borrowing household.
The figures confirm the nation’s massive household debt headache runs deeper than mortgages alone, as the looming threat of further interest rate rises adds yet more pressure to Queenslanders juggling home loans alongside car finance, credit cards and personal loans.
Digital Finance Economics data shows a typical Queensland household carries a total debt of $346,325, surpassing the national average of $320,525, but behind the ACT ($779,453) and NSW ($379,167).
The data shows 19 Qld suburbs where debt was more than three times the state average, including Meikleville Hill, where this house sold for $906,500
Of that amount, owner-occupied mortgages accounted for $158,298 and investment property loans $154,064, while households owed an average of $8,149 on unsecured debt such as credit cards and buy-now-pay-later purchases, and a further $25,814 for car, boat, improvement, and other personal loans.
The DFE analysis delved deeper, pinpointing 19 suburbs where household debt was more than three times the state average and exceeded $1m.
The regional coastal town of Barney Point, Gladstone, ranked as worst-affected, with a typical household carrying a staggering $1.63m in total debt, despite the suburb’s median house price of just $409,660.
Following closely were two well-heeled Brisbane suburbs, Highgate Hill and Fortitude Valley, with total household debts of $1.47m and $1.43m respectively.
Rounding out Queensland’s top 10 suburbs with the heaviest liabilities were Little Mountain, Mermaid Waters, Chapel Hill, Paradise Point, Victoria Point, Meikleville Hill, and Ascot.
Digital Finance Economics director Martin North said some families were in over their heads.
DFE director Martin North warned mortgage averages could be even higher than the figures showed, as data was weighted by outstanding balances and included long-term homeowners who had largely paid down their loans, pulling headline figures lower.
“We have a patchwork of households, some with no debt. Some have manageable debt, but others are already in over their heads,” he said.
“Recent first-time buyers who have leveraged up to buy despite appalling affordability, especially on the urban fringe, and in high-rise, plus first-generation migrations who have brought into the market in the past couple of years are in the front of the pain queue.”
Mr North said young growing families were among borrowers most likely to be affected by a rate rise.
Highgate Hill was one of the worst-affected Brisbane suburbs. This James St house sold for $2.37m
“Because we have seen little real income growth since 2007 for many households, the debt burden hangs like a noose round their necks,” he said.
Mr North said the figures exposing non-mortgage debt reflected a growing culture of “instant gratification”.
“Many are over-leveraged in search of specific lifestyles and it is linked often to poor mortgage affordability forcing people to borrow for other things, in search of instant gratification,” he said.
While mortgages typically offered lower rates and longer terms, unsecured and consumer loans were often more expensive and less flexible, meaning households with layered borrowing were most likely to feel the sting when rates rise.
Inner-city Fortitude Valley was another debt hotspot
Finance broker Andre Dixon, of Inovayt, said while debt levels correlated with larger mortgages in blue-chip areas, they were also a signal of buyers who had stretched their budgets to buy in.
“In higher-priced or high-demand suburbs, higher debt often reflects larger mortgages tied to property values rather than lifestyle spending,” Mr Dixon said.
Mr Dixon said many hopeful buyers were unaware of how their personal finances could impact their ability to secure a home loan.
“Many borrowers focus only on their home loan, but lenders assess all liabilities. Understanding and managing non-mortgage debt early can make a significant difference to borrowing capacity and long-term affordability,” he said.
Equifax chief solutions Officer Kevin James
This rising consumer debt coincides with a surge in mortgage demand, as highlighted by Equifax.
Mortgage demand has hit a three-year record high, fuelled by interest rate cuts, first homebuyer incentives, and rising rents.
The Equifax Consumer Market Pulse for December showed demand for home loans jumped 18 per cent compared to the same time last year – the biggest surge for the month since 2022.
Equifax chief solutions officer Kevin James said the rise in mortgage demand was driven by the expanded First Home Buyer deposit scheme as well as three cash rate cuts last year.
It comes ahead of the Reserve Bank of Australia’s (RBA) next Board Meeting on Feb 3, with the ASX Rate Tracker this week recording a 60 per cent market expectation of the official cash rate lifting 0.25 percentage points to 3.85 per cent.
On the Gold Coast, borrowing households in Mermaid Waters owed an average of $1.32m
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Compare the Market’s economic director David Koch warned that a single 0.25 per cent rate rise could push monthly repayments up by about $94 for someone with a $600,000 mortgage, an extra $1,128 a year for households also facing higher grocery, insurance, and energy costs.
“Australians don’t need to panic, but they should be prepared. Reviewing your home loan, understanding your options, and building financial flexibility now could help soften the blow if rates do rise later in 2026,” he said.
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