Qld housing crisis: 1 million households in financial stress

Close to one million households across Queensland are in financial stress as the cost of living and housing crisis hits a dire new peak. SEE THE WORST POSTCODES.

Close to one million households across Queensland are in financial stress as the cost of living and housing crisis hits a dire new peak.

More than 320,000 homeowners (more than 45 per cent) are in mortgage stress across the state, spending more than 37 per cent of their income on home loan repayments, exclusive new data from mortgage specialist Digital Finance Analytics (DFA) reveals.

Homeowners in Kippa Ring are in mortgage stress, according to Digital Finance Analytics.

Meanwhile the research estimates nearly 490,000 tenants — a whopping 72 per cent — are in rental stress, spending on average 36 per cent of their monthly wage on keeping a roof over their head, but it’s closer to 50 per cent in some postcodes like Rothwell and Kippa-Ring.

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The results from surveys of 52,000 households across the country reveal what proportion of income an average household is using to service their mortgage or pay rent, with rental stress in Queensland more than doubling from three years ago.

Martin North is the CEO and founder of Digital Finance Analytics. Photo: Hollie Adams.

Overall, 939,000 homeowners and tenants across the state are in financial stress, and breaking down the demographics, nearly 90 per cent of young families are in mortgage stress.

“What it shows is if you’re in the lower income range, some people are spending up to half of their income just to keep a roof over their heads,” DFA principal Martin North said.

The postcodes with the highest levels of financial stress in Queensland are in Rocklea, where 100 per cent of households are either in rental or mortgage stress; Loganlea (85 per cent), Marsden (83 per cent), Morayfield (82 per cent), and Highgate Hill (81 per cent). Even more than 70 per cent of households in the affluent suburb of Ascot are in financial stress.

Homeowners and renters in the Brisbane suburb of Rocklea are in financial stress, according to Digital Finance Analytics.

Outside of Brisbane, Toowoomba, Oakey, Warwick, Maroochydore, Barcaldine and Blackwater are among the suburbs where homeowners and tenants are facing the most mortgage and rental stress.

Nearly 9 in 10 tenants in Coomera are in rental stress, while more than 80 per cent of households in the postcodes encompassing Labrador, Southport and Yatala on the Gold Coast are also struggling to pay rent.

In Bundaberg and Toowoomba, more than 500 households are at risk of defaulting on their mortgages.

Homeowners in the inner Brisbane suburb of Ascot are in mortgage stress, according to Digital Finance Analytics.

The risk of default is also high in Mackay.

“The characteristics these areas share is that they have a lot of high growth corridors, a lot of new development, a lot of home and land packages,” Mr North said.

“These are often people who have moved out of the city to live, hopefully, cheaper, but they’re finding it really expensive.”

DFA defines a household as financially stressed if its outgoings are higher than its income.

But the figures show not everyone is doing it tough.

“There are hotspots where there are a lot of people really, really up against it, but there are others who are in a different world,” he said. “That creates complexity for regulators, and for individuals.”

An aerial view of residential housing around the Coomera River on the Gold Coast, where there is high financial stress, according to Digital Finance Analytics. Image: Dave Hunt.

“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, then it’s a real problem.”

Mr North said strong migration was also putting pressure on the situation, with the figures showing nearly 85 per cent of households with a multi-cultural background were in rental stress.

“A lot of those migrants who have come to the country are almost immediately living in financial stress,” he said.

“Migration is also 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.

Tenants and homeowners in Southport are in financial stress, according to Digital Finance Analytics.

“I worry some of those first-time buyers are buying the wrong property because they’re having to buy cheaper. I think people are making bad decisions because of it.

“The banks, of course, are now saying we can reduce lending standards even more, but that would be a major mistake in my opinion, given the amount of stress already out there.”

“We’ve got a crisis, and unfortunately, I don’t think politicians are reacting appropriately. “They should be dialling back migration and taking this much more seriously. It’s now a problem economically for the country.”

Mr North said the survey results looked at total household expenditure, which showed high amounts of income also going towards the cost of food and transport.

Homeowners and tenants in Toowoomba are in financial stress, according to Digital Finance Analytics.

“In many of these areas, we don’t have much public transport infrastructure, so a lot of money is being spent just getting about.”

It comes as new research from Canstar shows 49 per cent of mortgage holders have considered selling items to cope with rising interest rates.

Among the most common sacrifices are furniture, electronics, and collectables, with nearly one-third of respondents surveyed having sold these items.

The family home emerges as the second most common asset sold, with 28 per cent choosing to relocate, while 22 per cent opted to downsize or move in with family members. A further, 14 per cent sold their homes to rent instead.

Homeowners in Bundaberg are in mortgage stress, according to Digital Finance Analytics. Photo: Mike Knott.

This news follows the Reserve Bank’s decision to leave the cash rate at 4.35 per cent in May.

Canstar’s finance expert Steve Mickenbecker said the findings highlighted the two-speed borrower market, with only a portion of mortgage holders grappling with the extreme repercussions of rising interest rates.

“Even though the banks report only a relatively modest increase in home loan arrears, the strain of higher rates is taking its toll on a group of borrowers with half considering selling belongings and 46 per cent of that group — which is close to one-quarter of all borrowers — following through and actually doing it,” Mr Mickenbecker said.

Households in Mackay are in financial stress, according to Digital Finance Analytics. Picture: Heidi Petith.

“Job loss, family breakup, severe illness or worse can threaten our financial future. “Repayments rising by 62 percent coupled with high inflation creates a big enough event for many borrowers to trigger a response like selling assets to make ends meet. This is especially true for those who bought for the first time in the last four or five years.”