The Sydney suburb where nobody is behind on their mortgage

As some Sydneysiders fall behind on their mortgages in the cost-of-living crisis, there’s one suburb where everyone is managing to keep up.

Every single home borrower in Clovelly is up-to-date with their repayments – a neighbourhood where buyers often work as investment bankers or in other professional roles, cash gifts for a deposit of $1.8 million are not unheard of, and buying a $70 bunch of flowers to decorate one’s home is not considered much of an expense.

Celia Crawford runs a local florist and ceramics retailer in Clovelly.Credit: Janie Barrett

But locals still have to watch their budgets. Florist Celia Crawford runs China Clay in Clovelly and said the cost-of-living crisis has affected her business more than COVID-19.

“There’s this idea that residents in a beachside suburb with large homes and a lot of disposable income aren’t affected by cost-of-living pressures. People aren’t exactly getting a violin out for them,” Crawford said.

“They may have a high disposable income, but it’s also expensive to live here.”

Her business sells a $70 Work from Home Posy to decorate a home office. It began in lockdown.

Crawford said she’s heading into the busiest time of the year, but business is always seasonal.Credit: Janie Barrett

“We needed a little option, people don’t always want to spend a lot of money,” she said. “A small little bunch of seasonal flowers that they could either order for themselves or send to others that was a simple thing that wasn’t too much of an expense.”

Crawford said she had a quiet winter but is heading into the busiest time of the year.

“We don’t panic, as floristry is seasonal. We could have increased our prices, but people have less disposable income now,” she said.

Clovelly is NSW’s best-performing suburb for mortgage arrears, Moody’s Ratings research shows.

The report measured owners at least 30 days behind by May. Everyone in Clovelly was up-to-date, followed by Newington at 0.63 per cent in-arrears, and Belgravia at 0.64 per cent.

Casula (4.08 per cent) is Sydney’s worst-performing suburb, followed by Cabramatta and Punchbowl.

Moody’s Ratings analyst Letitia Wong said high incomes mean lower delinquency rates in suburbs such as Clovelly.

“The portion of loan as a percentage to their income is relatively low, so they tend to have a better financial buffer,” Wong said.

Wong said while interest rate cuts are expected next year, inflation is still high. She expects mortgage delinquency to increase in the next six months before gradually coming down.

“Some pockets will be especially vulnerable, with a relatively limited capacity to meet the increased repayment amount and deal with the higher cost of living.”

Clovelly residents were hesitant to speak on the record when approached by The Sydney Morning Herald this week.

Most insisted they were doing fine, and several said they did not have a mortgage. Another admitted he had so much debt but could not chat as he had to rush to a business meeting.

Clovelly is the Sydney suburb with the least-stressed mortgagors.Credit: Louise Kennerley

White-collar jobs are helping them stay afloat. Several were busy on Zoom calls and working from home when this masthead visited. Many homes were being renovated and most trusted their neighbours, leaving front doors wide open.

It’s a contrast to the residents of western Sydney’s Casula, who were overflowing with examples of how mortgage stress is affecting them when asked, taking on second jobs, dipping into superannuation and cutting out takeaways.

It comes as Westpac last week revealed 47,500 of its customers took a hardship package this year nationwide, but another 24 per cent are two years ahead on repayments.

Demographer Simon Kuestenmacher said it’s a tale of two cities.

“You can almost disregard the top end of the market as they’re always fine. But everyone feels the cost-of-living crisis in some way, unless you own your house outright and have huge cash savings,” Kuestenmacher said.

“Whether your household income is $300,000 or $100,000, you’re feeling the pressure in some way. Some may have to dramatically cut down on their spending, but those in wealthier suburbs may procrastinate on buying a new car or choose a Bali holiday over California.

“Your life gets depleted a tiny bit, and you feel cheated out of those wonderful times.”

Shaun Bettman of Eden Emerald Mortgages said Clovelly buyers include investment bankers seeking $7 million houses, and first home buyers in other white-collar professions.

Bettman said cash gifts are common in the eastern suburbs. “Most are around the $500,000 to $600,000 mark, but on the higher end, I’ve seen a $1.8 million gift.”

Finance Craft mortgage broker Shane Howley said most Clovelly buyers are owner-occupiers.

“They are locals who will do anything to stay put. I think that’s why the delinquency rates are low. It’s a higher-income area,” he said.

McGrath Coogee agent Mark Mcpherson said young families, returning expats, celebrities and gamers are also buyers. Jackie “O” Henderson splashed $13.25 million last year.

Mcpherson said locals are out in force on weekends, but there’s been a shift in spending. “Coffee shops aren’t as full as what they were four years ago.”