Tassie’s debt stress secret suburbs revealed

Research by Digital Finance Analytics director Martin North shows household debt is higher in Warrane than any Tasmanian suburb. Picture: Supplied

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Tasmania’s hidden family debt hotspots have been revealed.

And while the state’s average debt is under $200,000 — less than the national average of $320,525 — some suburbs have debt at three times Tassie’s average.

The research by Digital Finance Analytics found three Hobart suburbs and two regional areas that headline financial stress charts with debts that are over $500,000.

Hobart’s Eastern Shore suburb, Warrane, has the highest level of household debt at $635,960, followed by North Hobart ($624,965), Huonville ($620,349), Dynnyrne ($556,245), and Burnie suburb, Acton ($553,281).

The lowest debt levels were in regional areas — Winkleigh, Evandale, Taranna and Avoca — with debt between $3200 and $8300.

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Warrane households have high debt levels, a report shows.

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Tasmania’s average debt is $190,935, the second-lowest result, behind only the Northern Territory. Most states had debt in the $300,000s, while ACT ranked No.1 with its $779,453 average total debt.

DFA analysed a range of debt types including mortgages, investment properties, credit card balances, by now pay later, payday loans, car loans, and personal spending loans.

Tasmania’s average mortgage is $127,066, the report said. On top of this, Tasmanians had a $42,210 average investment debt, $5923 in unsecured debt and $15,738 in consumer loans.

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DFA 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.

Martin North.

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“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 at the front of the pain queue.”

Derwent Finance director Rhianna Farnan said for people who seek home loan approval, getting credit card debt under control was a smart place to start.

Ms Farnan said any debt would reduce someone’s borrowing capacity.

“Something to be mindful of is that lenders will look at the maximum amount available on the card, rather than if it is paid off or not,” she said.

“A $10,000 card is a $10,000 debt, even with a $0 balance.”

Derwent Finance director and COO Rhianna Farnan.

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Ms Farnan said HECS debt payments are based on income, meaning if someone has paid off a little or a lot, there’s no difference in the lender’s eyes until the debt is paid off completely.

“Some people use savings to pay off a HECS debt, then use a guarantor to increase their borrowing capacity,” she 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 often linked to poor mortgage affordability forcing people to borrow for other things, in search of instant gratification,” he said.