The Urban Developer
AdvertiseEventsWebinarsUrbanity
Industry Excellence
Urban Leader
Sign In
Membership
Latest
Menu
Location
Sector
Category
Content
Type
Newsletters
Urban Leader Awards Logos RGB White
NOMINATIONS CLOSE SEPTEMBER 12 RECOGNISING THE INDIVIDUALS BEHIND THE PROJECTS
NOMINATIONS CLOSING SEPTEMBER 12 URBAN LEADER AWARDS
LEARN MOREDETAILS
TheUrbanDeveloper
Follow
About
About Us
Membership
Awards
Events
Webinars
Listings
Resources
Terms & Conditions
Commenting Policy
Privacy Policy
Republishing Guidelines
Editorial Charter
Complaints Handling Policy
Contact
General Enquiries
Advertise
Contribution Enquiry
Project Submission
Membership Enquiry
Newsletter
Stay up to date and with the latest news, projects, deals and features.
Subscribe
ADVERTISEMENT
SHARE
print
Print
OtherMon 05 Feb 18

Mortgage Stress Rising Among Australian Households

40d40344-aa0c-49db-9a5f-02b754960168

Almost half of all Australian households paying off a mortgage are experiencing mortgage stress, with lower-income households particularly at risk amid stagnating wage growth and rising expenses.

Survey findings from ME Bank’s latest Household Financial Comfort Report revealed that the proportion of households paying more than 30 per cent of their income on housing costs has risen to 46 per cent.

Report author Jeff Oughton said that this was a common indicator of financial stress.

Housing stress is even higher among renters, with more than seven in 10 households paying more than 30 per cent of their income on housing costs.

“The rising cost of necessities is currently holding Australians back when it comes to their finances,” Oughton said.

“It’s unsurprising households are still feeling the pinch, given subdued income growth and the rising costs of energy, childcare, education and health.”

Keeping a roof over one’s head was of particular concern to many who informed the report’s data, with 7 per cent of households reporting they could not always pay their mortgage on time during the past year.

According to the report, consistent with current high levels of mortgage stress among lower income households, expectations about higher loan rates caused some household concern.

“Higher interest rates will negatively impact household cash flows, reduce household savings and/or spending and impact the ability to service debt.

“More households reported to be ‘worse off’ than ‘better off’ if changes in the economy were to lead the RBA to increase interest rates by a total of 1.0 per cent in the near future.”

The proportion of households who “worried about their household’s level of debt over the last month” increased by to 38 per cent. This proportion increased to 51 per cent among mortgage holders, compared to 27 per cent with no mortgage and 23 per cent who own their own home outright.

Around 72 per cent of renters spent 30 per cent or more of their disposable income on rent and 46 per cent of those paying off a mortgage putting 30 per cent or more of their disposable income towards this.

While housing costs were added to other expenses like bills, utility and vehicle maintenance to paint an overall picture opposite to complete prosperity, ME revealed that households under 35 years old without children have bucked the trend as they have benefited from improved employment conditions without the burden of childcare costs, and are therefore not as worried.

“Their financial comfort rose by eight per cent, and their comfort with living expenses increased two per cent during 2017,” Oughton said.

Nearly 30 per cent of parents offer financial assistance to their children, making the “bank of mum and dad” the nation’s fifth largest lender and an increasingly recognisable outlet for alleviating mortgage stress.

Around 29 per cent of Australian families offer financial assistance to their children.

ResidentialAustraliaFinanceSector
ADVERTISEMENT
TOP STORIES
Stockland bumps up its apartment pipeline in melbourne and sydney
Exclusive

Stockland Re-Enters Density in $5bn Apartment Play

Renee McKeown
4 Min
Woolloongabba Precinct Vulture St
Exclusive

Brisbane Developer in Cross River Rail Compensation Tussle

Clare Burnett
4 Min
The Mondrian Gold Coast hotel's food and beverage is driving profits
Exclusive

Touch, Taste, Theatre: What’s Driving Mondrian’s Success

Renee McKeown
6 Min
Fortis’ display suites are designed as brand environments first, with tactile details and curated design to build buyer confidence before project specifics.
Exclusive

Relevant or Redundant: Will Tech Kill Display Suites?

Vanessa Croll
7 Min
Exclusive

Missing Heart: Why The Gold Coast Needs a CBD

Phil Bartsch
7 Min
View All >
South Melbourne social housing precinct
Affordable & Social Housing

South Melbourne Housing Precinct Revamp Takes Next Step

Leon Della Bosca
Stockland bumps up its apartment pipeline in melbourne and sydney
Exclusive

Stockland Re-Enters Density in $5bn Apartment Play

Renee McKeown
The Adelaide purpose built student accommodation market is about to increase by 1058 beds with the State Commission Assessment Panel supporting two towers in the making.
Student Housing

Highrise Approvals Add 1000-Plus PBSA Beds in Adelaide

Renee McKeown
The two towers, of 35 and 34 storeys, help cement the SA capital’s growing status as the best place in Australia for the…
LATEST
South Melbourne social housing precinct
Affordable & Social Housing

South Melbourne Housing Precinct Revamp Takes Next Step

Leon Della Bosca
2 Min
Stockland bumps up its apartment pipeline in melbourne and sydney
Exclusive

Stockland Re-Enters Density in $5bn Apartment Play

Renee McKeown
4 Min
The Adelaide purpose built student accommodation market is about to increase by 1058 beds with the State Commission Assessment Panel supporting two towers in the making.
Student Housing

Highrise Approvals Add 1000-Plus PBSA Beds in Adelaide

Renee McKeown
3 Min
JQZ Parramatta EDM
Residential

JQZ Plots 10-Storey Addition to Parramatta ‘Auto Alley’ Plans

Clare Burnett
3 Min
View All >
ADVERTISEMENT
Article originally posted at: https://www.theurbandeveloper.com/articles/mortgage-stress-rising-among-australian-households