Digital Finance Analytics founding principal Martin North says cost pressures and bigger mortgages thanks to strongly rising property prices in Queensland are putting even more pressure on households.
Almost 850,000 households in Queensland are in financial stress as the cost of living and soaring property prices hits a dangerous new peak.
More than 331,000 homeowners (more than 43 per cent) are struggling to keep up with their mortgage repayments across the state, exclusive data from mortgage specialist Digital Finance Analytics (DFA) reveals.
The research shows it’s worse for renters with 490,000 households (72 per cent), or three out of four struggling to keep a roof over their head.
8 Creekstone Ave, Redbank Plains recently sold for $890,000.
“Cost pressures and bigger mortgages thanks to strongly rising home prices are putting more pressure on households, at a time when incomes are not rising in real terms,” said Digital Finance Analytics founding principal Martin North.
“Mortgage stress is high in the high growth new suburbs around our urban centres, where many are new purchasers, plus across the fringe areas where many disadvantaged families live, and we see many new migrants also caught.
“That said, there are pockets of stress among some more affluent households, especially those with big mortgages, and big spends.”
Mr North said financial stress was determined if a household’s income was less than their outgoings.
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Miniature wooden houses and a red arrow down. The concept of low cost real estate. Lower mortgage interest rates. Falling prices for rental housing and apartments. Reducing demand for home buying
The postcodes with the highest levels of financial stress in the southeast are in Pine Mountain, Daisy Hill and Tanah Merah, where 100 per cent of households are in mortgage stress.
Geebung recorded 96.4 per cent, followed by Durack (93.2 per cent) and Albany Creek (89.1 per cent).
Even more than 86 per cent of households in the affluent suburb of Camp Hill are in financial stress.
On the rental front, almost every tenant in Caboolture is in financial stress (95.9 per cent), followed by Ipswich (91.5 per cent), Bellbird Park (86.5 per cent) and Durack (86.4 per cent).
Outside of Brisbane, the worst suburbs for mortgage stress are Mount Pleasant (Mackay), Highfields (Toowoomba), Manunda (Cairns), and Mothar Mountain (Gympie) while renters are struggling in Craignish and Bundaberg (Wide Bay), and Barney Point (Gladstone).
Prime Minister Anthony Albanese and Treasurer Jim Chalmers watch as Reserve Bank Governor Michele Bullock emerges.
Experts say there is no reprieve in sight with April’s CPI release from the ABS revealing annual inflation was spiralling out of control, now at 4.6 per cent, up from 3.7 per cent last month.
Mr North said next week’s predicted interest rate meeting would hurt those already struggling.
“Rates will rise, and will directly lift mortgages stress,” he said.
“Investors will see their costs rise, and I expect rents to rise as a result.
“Renters have few choices, but to pay up to stay or seek cheaper further out – but petrol costs rising makes that difficult.
“In each case, people cut back on spending (and) buy cheap goods. Poorer quality food, cut back on medical and dental, hunker down, grab more loans.”
33 Botany Drive, South Ripley recently sold for $960,000.
But, he said, there was a huge split between those struggling and those riding Queensland’s property boom.
“Not everyone is in the same boat,” he said.
“About half of mortgage holders have cash flow issues, and three quarters of renters. But the others are managing, just.”.
“Also remember that one third of homeowners have no mortgage at all, so are enjoying the recent price rises.”
Canstar data insights director Sally Tindall.
Canstar data insights director Sally Tindall shared a similar view.
“Another hike on Tuesday would help get the inflation job done, but at what cost,” Ms Tindall said.
“This is what will be weighing heavily on the Board’s mind. Push too hard and the economy could buckle.
“Many households are already feeling the strain.
“Consumer confidence is sitting deep in the doldrums and Australians have already tightened their purse strings on the back of higher petrol prices and global uncertainty.”
Boss Money director and mortgage broker Tom Uhlich.
Boss Money director and mortgage broker Tom Uhlich, who has been a broker for 22 years, said Brisbane was a tale of two cities when it came to mortgage stress.
“People who have loans before 2020 are doing okay, where as those who bought 2022 to 2024 (on the lower rates), are the ones feeling every rate move,” Mr Uhlich said.
“These clients have seen their repayments jump $2,000 per month since they got in, with no real substantial increase in household income.
8 Creekstone Ave, Redbank Plains recently sold for $890,000.
“Most I have spoken to haven’t seen large increases in income so we cant even refinance them to a cheaper product at another bank.
“We cant even fix them to get some sort of security for a few years.
“I feel bad telling them I cant put them in a better position and they need to ride this out.”
He said he was seeing one in four struggling and looking for ways to reduce their repayments.
“(They want to use) funds in redraw or are even asking their lender to switch to interest only for a short period.
“This was okay in the past but banks are very strict with this now and seem to prefer sending them to hardship status.
Many households are already feeling the strain.
Mr Uhlich said in the long run, the expensive price of fuel was no comparison compared to not finding the best interest rate.
“I’ve actually done some sums on this and found for the average Australian the fuel rise from$2 to $2.30 costs them approximately $1200 extra per year,” he said.
“We have clients who come to us with 1 to 1.25 per cent higher rates than the market which is costing them $8,000 per year.
“But they drive around looking for cheaper fuel yet leave their high interest rate on their biggest debt, attached to their biggest assets as is.”
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