Dire new reality of Sydney homeowners revealed

The extreme cost of living stress more than half of Sydney homeowners are under has been revealed in a shock new report.

Pressure on homeowners has hit new heights, with an exclusive report showing more than half of NSW borrowers are currently experiencing mortgage stress.

The Digital Finance Analytics (DFA) study revealed that as of the end of April, 50.74 per cent of borrowers were in mortgage stress, up from 45.35 per cent one year earlier, and 40.79 per cent at the time of the RBA’s first rate hike in 2022.

DFA analysed 52,000 households across Australia, looking at the proportion of income on average people were using on mortgage payments, along with essential costs such as food and transport. The resulting numbers painted a dire picture, according to DFA principal Martin North.

“Some people are spending up to half of their income just to keep a roof over their heads,” Mr North said. “If you’re in the fortunate 40 or 50 per cent of families where there’s family money … you can pass money down, but if you’re outside of that, it’s a real problem.”

Renters were even worse off, the data showed, with 80 per cent of tenant households enduring rental stress

Pockets of hope open up for struggling Sydney homebuyers

As of the end of April, 50.74 per cent of borrowers were in mortgage stress, up from 40.79 per cent at the time of the RBA’s first rate hike in 2022. Pictured is RBA governor Michele Bullock. Picture: Nikki Short

MIGRATION ‘MAKING THINGS WORSE’

Mr North said the RBA rate hikes in recent years were a factor, but recent strong migration was adding to the problem.

Some NSW households were paying up to 50 per cent of their income on their mortage repayments. Picture: Gaye Gerard

“Migration is putting significant pressure on rental costs, which is then spilling over into people trying to rent or buy a first home. It’s a real mess.

“We’ve got a crisis, and unfortunately, I don’t think politicians are reacting appropriately. They should be dialling back migration.”

Abode Property agent Dax De Traubenberg, who specialises in Caringbah and surrounding suburbs, has noticed less buyer activity due to rate rises and mortgage stress.

Ryan Almond and Courtney Strong purchase in Jannali for their growing family and have been hit with seven rate hikes since purchasing while Ms Strong has been off work on maternity leave. Picture: Tim Hunter.

“It can have a negative impact on the market, people want to upgrade for life reasons but can’t because they can’t manage that larger mortgage,” he said.

“In years gone by people would come by on the Saturday morning to look at the property and you could sell it that afternoon. Now, people are taking a lot more time and putting offers on multiple properties.”

HOMEBUYERS DESPERATE FOR A RATE CUT

He said a rate drop would give buyers the confidence they need.

Ryan Almond and Courtney Strong purchased a home in February 2023.

Ryan Almond and Courtney Strong with their kids Maisy 3, Harry 2 and 5 week old Leo. They have Picture: Tim Hunter.

After spending years renting in Cronulla as they saved, they bought in Jannali to suit their budget and growing family.

Mr Almond said they have since been hit hard with rate rises.

“We have copped at least seven rate rises, I think our (monthly) mortgage went from $4100 to $4800,” he said. “And since then we have had another child so my partner has been off work so we have just had the one income.

“It’s affected a lot of people, we have had some mates that bought their houses two years ago and they’ve had to move back in with family.”

Originally published as Dire new reality of Sydney homeowners revealed