SA suburbs with 100 per cent mortgage stress

Cost of living and high interest rates are pushing SA households to the brink, the latest mortgage stress data shows. Search the suburbs most at risk.

Interest rates and cost-of-living pressures are pushing South Australian homeowners to the brink, with 100 per cent of mortgage holders in some suburbs and towns now rated as at risk of defaulting on their payments.

Digital Finance Analytics’ latest report – titled the “Great Australian Nightmare” – shows the number of homeowners in mortgage stress in battling suburbs such as Gawler East, Wynn Vale and Christies Beach has reached saturation point.

“Mortgage stress has never been higher than it is right now. We are in a very, very difficult situation at the moment for many households,” says DFA principal Martin North.

“They are now giving up on medical treatment, dental treatment and some are having to take their kids out of private school. It’s young families and first-home buyers, they are the ones who are in the most pressurised situation.

“It doesn’t mean you’re going to find massive defaults next week … but the migration from cash-flow problems to missing payments to default is a risk. Many people are facing a difficult 2025/26.”

The DFA research shows nearly 300,000 of South Australia’s 739,760 households are now in mortgage or rental stress and 318,630 are considered to be in financial stress.

Mortgage stress affects 53.3 per cent of South Australia’s home loan holders – the third-highest rate in the nation behind Tasmania on 57.5 per cent and Victoria (53.6 per cent) – while 68.5 per cent of the state’s renters are in stress.

Nationally, 50.1 per cent of home loan owners are in mortgage stress and 76.4 per cent of renters.

Mr North warned the dire situation facing South Australian homeowners could deepen in coming months, particularly for new mortgagees.

Digital Finance Analytics analyst Martin North.

The median house price in South Australia hit a new record in December, reaching $850,000 for metropolitan Adelaide and $768,000 across the state.

“Even if we get some small rate cuts from the Reserve Bank of Australia, it’s not going to be sufficient to reverse the trends. Given the high level of financial pressure, I expect to see more getting into trouble,” Mr North said.

“There is still strong demand for property in SA generally, because prices, though higher are still more reachable than in many other states. However, banks have imposed some borrowing limitations in terms of income multiples, which is making it harder for some to get into the market, and to stay there.”

Postcodes with 100 per cent of householders in mortgage stress include the booming suburbs of South Plympton, Glandore and Novar Gardens and the rural towns of Port Elliot, Virginia and Macclesfield, which also has 100 per cent rental stress.

Oakden, Magill, Colonel Light Gardens, Clovelly Park and Rostrevor are also at saturation point for rental stress.

DFA’s report – based on surveys of 52,000 SA households – defines households as being in mortgage or rental stress if their outgoings, excluding one-off discretionary items, exceed their income.

Mr North said the communities in those areas would suffer from a lack of local spending and a potential increase in crime by desperate people.

“This is a social issue as well as a financial and economic issue,” he said.

It is backed up by Roy Morgan research showing more than one in five young married South Australian parents are now at “extreme risk” of mortgage stress.

Young married couples with kids have been hardest hit, Roy Morgan research shows.

The Roy Morgan research, which uses different parameters to create its data, shows the number of young, SA-based married couples with children in extreme risk of mortgage stress had reached 21.5 per cent in the three months to December last year, a 68.8 per cent jump from April 2022.

Older couples with children were also feeling the heat from the Reserve Bank’s decision to keep interest rates on hold for more than 12 months, with 17.9 per cent now at extreme risk of mortgage stress – a 60.8 per cent rise since just before the last federal election.

That compares with just 7.7 per cent of older married couples with no children and 11.6 per cent for younger married couples with no children.

Overall, 17.6 per cent of SA homeowners are now at extreme risk of mortgage stress, a 50.3 per cent rise from 11.7 per cent in April 2022.

Mortgage holders are considered to be at extremely high risk of mortgage stress if even their interest-only repayments amount to 25 per cent to 45 per cent of their after-tax household income, depending on their spending.

The data shows 27.9 per cent of all Australian mortgage holders are under pressure and rated as “at risk” of mortgage stress.

It’s the second month in a row the rates of mortgage stress in Australian households have risen. Before that, they were on the way down for four straight months in the wake of the federal government’s July 2024 Stage 3 tax cuts.

The Roy Morgan research shows if the Reserve Bank cuts rates by 0.25 per cent to 4.1 per cent at its February 17 meeting, the number of Australians at risk of mortgage stress will drop 1 per cent to 26.9 per cent of mortgage holders by March this year.