The state of the current housing crisis has been laid bare with new data revealing there are five SA suburbs where every household is experiencing mortgage or rental stress – something one expert says could lead to an increase in crime and domestic violence.
Walkley Heights in Adelaide’s northern suburbs and Magill in the leafy east both have 100 per cent of homeowners currently cashflow-stressed, meaning their expenditure is exceeding income.
It is closely followed by Elizabeth North, again in the northern suburbs at 97.4 per cent of households, and Mount Barker in the Adelaide Hills at 95.8 per cent.
More than nine in 10 (91.7 per cent) households in Oakden are stressed, while Paralowie, Parafield Gardens, Marion, Seaford Rise and Gawler East rounded out the top 10.
Digital Finance Analytics analyst Martin North
Digital Finance Analytics data scientist and banking analyst Martin North said high-growth suburbs were seeing highest stress levels defined by cashflow, because of a concentration of new purchasers, especially first time buyers, plus home and land packages which tend to have high a loan-to-value ratio.
“Stress shows households have cash flow pressure, so they cut back on spending, and hunker down, leading to lower economic activity,” he said.
“If this continues some people may eventually default on their mortgage, but this process takes a long time, and banks try to “extend and pretend” by extending loan terms or offering interest only.
Suburbs across Adelaide are struggling to meet payment requirement. Picture: Supplied
“It also means more people working more jobs, more social pressure, and eventually higher crime and family violence.”
When it comes to rental stress, there were three SA suburbs where all households had more money leaving it than coming into it.
They were Marion in Adelaide’s south, Glenlelg North in the west, and the northwestern Woodville North which all recorded a 100 per cent stressed rate.
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Oakden and Croydon Park completed the top five, with 90.9 per cent and 88.9 per cent of households stressed respectively, while Payneham, Seaton, Murray Bridge, South Plympton and Clearview completing the top 10.
“Rental stress is way worse than mortgage stress,” Mr North said.
“This is the bigger immediate issue given low rental supply and rising rents.”
Turner Real Estate managing director Lachlan Turner
Turner Real Estate managing director Lachlan Turner said a lack of supply across both markets were fuelling the need for people to spend.
“Stock levels continue to tighten, sitting 15 per cent lower than this time last year, with lower-quartile homes – between $600,000 and $700,000 – leading price growth, up 3.3 per cent for the quarter compared to 1.7 per cent at the upper end – $1.2m-plus,” he said.
“Meanwhile, the rental market remains highly competitive, with weekly asking rents averaging $610 for houses and $550 for units, delivering healthy 3.4 per cent and 4.5 per cent gross yields respectively.”
– with Aidan Devine
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