Gold Coast mortgage stress worse in 2019 than 2018 as financial fears grow
A record number of Gold Coasters are in financial stress according to new data revealing a dramatically worsening situation in the past year. These are the suburbs facing the worst mortgage stress. FULL SUBURB-BY-SUBURB BREAKDOWN
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A RECORD number of Gold Coasters are in financial stress according to new data revealing a dramatically worsening situation in the past year.
The number of Gold Coast households under financial pressure has grown by more than 2500 in under 12 months, according to data compiled by Digital Finance Analytics (DFA).
Of the Coast’s 87,640 owner-occupiers with mortgages, 15,375 are officially deemed in stress
A suburb-by-suburb breakdown reveals the number of owner-occupiers within a month of defaulting on payments has also increased to 1500.
Industry experts say the shock figures are the result of lenders being more conservative when extending lending after fallout from the Royal Commission into banking.
Plus banks are increasing their interest rates, they say.
WHAT COAST HOME OWNERS OWE CITY HALL
DFA principal Martin North said 2019 would be a make-or-break year for the Gold Coast’s housing market.
“My net conclusion is 2019 will be a troublesome year for households wrestling with large mortgages,” he said.
“The cost of living is rising and incomes are not and stress around things like council rates are up in a big way, as are those relating to school fees and healthcare.
COAST SUBURB WITH WORST DEBT TO INCOME RATIO
“These are big issues and in my survey people fear they will have to give up their private healthcare to make ends meet.
“Things are worse than they were just a few months ago,” he said.
According to the data the 4220 postcode - containing Burleigh Heads, Burleigh Waters and Miami - has the highest number of households in stress, with 1590. That amounts to 33 per cent struggling.
In postcode 4230, taking in Robina Town Centre’s surrounding area, all 125 borrowing households are under mild forms of financial stress but only two are at risk of default.
There are 173 households rated as being in “severe stress”, all in the 4217 postcode, including Surfers Paradise, Benowa, Bundall, Chevron Island and Isle of Capri.
“The people of Surfers Paradise have a deep problem - they are deeply underwater from a cash flow perspective and they are most likely to default sooner,” Mr North said.
“I cannot see anything other than more difficulties ahead as retail spending is coming off and with interest going up at banks I think we will see mortgage rates go up.
“My expectation is that stress will continue to develop.”
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However, Mr North said the Gold Coast was defying a nationwide trend of having an inherently strong demand for construction and development while other markets were cooling.
Several major projects have recently broken ground or are set to begin in coming months, including The Star’s $450 million Dorsett Hotel and Star Residences, and The Ruby Collection’s remaining three towers.
A suburb defying the trend is Tugun on the southern Gold Coast. It has zero reported cases of households under mortgage stress.
Other suburbs with lower levels of stress include Currumbin and Currumbin Waters and Ormeau on the far north.
James Hasselle, owner of Mortgage Choice Miami-Burleigh-Palm Beach, said the spike in struggling Gold Coasters was likely the result of large numbers of households coming out of fixed rate interest-only periods which began in 2016.
He urged owner-occupiers facing hardship to take steps to limit the likelihood of defaulting.
“People will have noticed interest rates have gone up in the past 12 months and this means their mortgage payments will have gone up,” he said.
“Make sure your bank account is not overdrawn and you are not late on your bills.
“A lot of people are coming out of interest only periods and the whole market has changed since then.
“My advice would be to go to a broker and review your loans and finances.”
Gold Coast Households at risk of defaulting within 30 days
* (Nerang/Pacific Pines/Carrara/Beechmont/Gilston/Highland Park) 168
* (Stapylton/Yatala/Steiglitz) 120
* (Coomera/Willowvale/Pimpama/Upper Coomera) 104
* (Ashmore/Arundel/Parkwood/Molendinar) 101
* (Burleigh Heads/Burleigh Waters/Miami) 100
* (Surfers Paradise/Bundall/Benowa/Chevron Island/Main Beach) 96
* (Worongary/Tallai/Springbrook/Mudgeeraba/Bonogin/Austinville) 95
* (Runaway Bay/Biggera Waters/Coombabah/Hollywell/Paradise Point) 85
* (Southport/Labrador/Chirn Park) 83
* (Sanctuary Cove/Helensvale/Hope Island) 82
* (Broadbeach/Mermaid Beach/Mermaid Waters) 79
* (Robina/Merrimac/Clear Island Waters) 78
* (Palm Beach/Elanora) 75
* (Oxenford/Maudsland/Wongawallan/Studio Village/Guanaba) 69
* (Varsity Lakes/Reedy Creek) 60
* (Ormeau/Norwell/Jacobs Well/Kingsholme/Gilberton) 55
* (Currumbin/Currumbin Valley/Currumbin Waters) 36
* (Tugun) 27
* (Tallebudgera/Tallebudgera Valley) 19
* (Coolangatta/Bilinga) 9
* (Robina Town Centre) 2
TOTAL: 1543
Source: Digital Finance Analytics
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