NSW coronavirus: Mortgage stress data for your suburb, region
New data has revealed the NSW regions where homeowners are most at risk of mortgage stress during the coronavirus pandemic. It’s one of several data analysis graphics detailing the types of people affected and how much they are impacted. SEE OUR OTHER INTERACTIVE SPECIALS.
Local
Don't miss out on the headlines from Local. Followed categories will be added to My News.
- Tips for homeowners to beat mortgage stress
- Mortgage customers fear losing their homes
- Way to save $164k on your mortgage
SEVEN in ten young families living in hard-hit Sydney suburbs face selling their homes as they struggle to meet mortgage payments, new COVID-19 statistics show.
Digital Finance Analytics principal Martin North says those living in new estates in fringe suburbs are spending more on repayments and food, childcare and transport bills than they can earn.
Mr North’s research, exclusive to News Corp, reveals mortgage stress for young growing families has risen 15 per cent since January, with COVID-19 amplifying these pressures.
“Many households work multiple part-time jobs to try to bring in income to pay for their needs,” Mr North says.
“They’ve got their large mortgages and incomes are under pressure.”
Mr North’s research with Digital Finance Analytics shows the “battling urban” – high-density housing residents on middle or low incomes – and the “disadvantaged fringe” – city fringe dwellers in new estates or low socio-economic areas – were also hit hard.
His research uses a cash flow analysis to calculate mortgage stress; if a mortgage holder has more money going out than coming in, they’re in stress.
Wage subsidy fears
The Federal Government plans to cut JobKeeper from $1500 to $1200 a fortnight from October, then down to $1000 in January.
Those on JobSeeker will go from receiving $1,115 to just $815 a fortnight - or $58 a day.
Grattan Institute program director Brendan Coates fears the cuts will push struggling families over the fiscal edge.
“Ten billion dollars a month in emergency income support will be taken out of the economy by the December quarter - that does risk a second downturn,” Mr Coates says.
He says Australians will fight to keep paying off their homes but many may default without additional support.
“History shows that Australians will do almost anything to keep repaying the mortgage.”
Sydney’s Jackie Machado has been hit twofold, facing housing stress and a $10,000 medical bill after emergency surgery on her spine.
“I had a really unlucky situation where, during the COVID period, I had to have an urgent operation on my spine - I had a disc explode in my spine,” Mrs Machado says.
Unable to work for eight weeks and relying on husband Daniel’s casual employment, the couple are deferring their home loan repayments and withdrawing some of their super to help pay the bills.
“Having my operation on top of everything else and having that extra cost - we really didn’t have an option,” Mrs Machado says.
Mr and Mrs Machado moved to Willowdale three months ago with their daughter Isabella, five, to give her an idyllic Australian childhood.
But the couple now worries their mid-pandemic move has left them in a precarious position.
“If Coronavirus continues and, say, something happens to our jobs, everything that we‘ve built for her is going to be gone,” she says.
Yet Jackie thinks she’s in a far better position than many young Australians struggling to meet mortgage repayments, due to support from her parents and financial advice.
“In Australia, if you don‘t have that family support, I think it’s going to be really hard to do what we have done,” she says.
“We‘ve been able to come back down to basics, really appreciate the small things.”
The city’s outskirts are struggling
In the chart below, News Corp looks at Mr North’s Digital Finance Analytics research alongside Australian Bureau of Statistics SA2 regions to determine which areas are under the most mortgage stress.
“These are areas of high property development in recent years – mainly small plots, over developed – and people have bought often from the plan at high prices,” Mr North says.
The state’s far-north spanning the towns of Lismore, Tweed Heads and Ballina has the least stress, but still holds several pockets of disadvantage.
Four in 10 at risk of defaulting
The chart above reveals a third of households were already in mortgage stress before coronavirus, but that rate has risen sharply since March.
The federal government’s extension of JobKeeper and JobSeeker payments will be a lifeline for many, but financial comparison site Mozo finds almost 40 per cent of recipients surveyed say the existing rate of $1500 isn’t enough to pay the bills, let alone the proposed new rates.
The suburbs most at risk of an employment crisis
Centre of Full Employment and Equity professor Bill Mitchell says the Federal Government’s reduction in both the JobKeeper and JobSeeker payments has just delayed the “day of reckoning”.
“The last thing you want the government to do when you’ve got rising unemployment, widespread business defaults and bankruptcies is to cut government spending - and, effectively, that’s what they’ve done,” Mr Mitchell says.
“The day of reckoning, they’ve just delayed it.”
The centre tracks which Australian suburbs are at risk of an employment crisis due to COVID-19.
NSW SUBURBS MOST AT RISK OF WIDESPREAD UNEMPLOYMENT
- Cabramatta - Lansvale
- Shortland - Jesmond
- Beresfield - Hexham
- Tweed Heads South
- Cessnock
- Singleton
- Canley Vale - Canley Heights
- Kurri Kurri - Abermain
- Fairfield West
- Muswellbrook
The model shows traditional working-class areas will bear the brunt of the oncoming financial hit.
But Mr Mitchell predicts many aspiring young families who’ve bought big in areas including Green Valley and Edensor Park are in serious danger of finding themselves unemployed and at risk of losing their homes due to sky-high levels of debt.
Families in these suburbs more often rely on part-time work to pay off debts - leaving them in dicey situations when companies shed staff.
“The family economy, the business model, is highly dependent on the second breadwinner,” Mr Mitchell says.
“In this lockdown, to deal with the health crisis, a lot of the sectors that those second breadwinners work in - the hospitality, accommodation, cafes, tourism, what have you - they‘ve been completely shut down.
“Not only do they become jobless, but they also start becoming insolvent and losing their homes.”
Coronavirus job drop stabilises
Job losses have slowed down across the board although millennials are still struggling, with jobs for people aged 20 to 29 down by eight per cent.
The chart below shows the decrease in payroll jobs since the 100th confirmed case of COVID-19 in Australia in March, based on data released by the Australian Bureau of Statistics.
The ABS payroll index reveals more than a quarter of jobs for teenagers were lost shortly after the pandemic, but nearly all have been clawed back as restrictions eased across the state.
Wealthy suburbs swarm to Centrelink
The Department of Social Services also publishes monthly data on how many people are receiving JobSeeker payments.
At first glance, their data shows the traditionally wealthy suburbs of Avalon, Bondi and Lilli Pilli taking a hit, with the number of JobSeeker recipients in these towns quadrupling.
But these areas had very low numbers of people on the payment to begin with. Lilli Pilli went from 14 residents claiming JobSeeker in March to 76 in June.
The Byron Shire is seeing some of the largest increases in JobSeeker payments, with nearly 24 per cent of Byron Bay on JobSeeker last month - compared with just 8 per cent in March.
Canterbury, Liverpool and Greenacre have also witnessed large increases in Centrelink claims.