Melbourne suburbs suffering worst mortgage stress

These are the Victorian suburbs where thousands of families are stretched to the limit, as the Reserve Bank prepares to lift interest rates.

Six of the top 10 postcodes nationwide for mortgage stress are in Victoria, according to a new analysis which reveals hundreds of thousands more families will be stretched to the limit as interest rates rise.

There are 1.5 million households already battling to meet their repayments – based on a survey of 52,000 households by Digital Finance Analytics – including 44 per cent of Victorian homeowners.

The report comes as Labor’s radical new plan to help more Australians break into the housing market was praised by industry experts but attacked by Scott Morrison.

With the Reserve Bank tipped to lift rates as early as Tuesday, the DFA analysis produced with home loan marketplace Joust shows a 0.5 per cent increase would tip another 143,124 households into mortgage stress, while a 1 per cent rise would impact 321,874 households.

Mortgage stress is higher in Narre Warren South, Berwick, Roxburgh Park, Cranbourne, Sydenham and Pakenham than almost anywhere else in the country.

There are seven electorates nationwide where at least 70 per cent of households are under mortgage stress, six of which are held by Labor, including McEwen and Hawke in Victoria.

On Sunday, Labor promised to help 10,000 Australians buy homes each year with a 2 per cent deposit, backed by the government taking an equity share of up to 40 per cent.

The Prime Minister accused the opposition of “looking to make money” by keeping the commonwealth’s share of capital gains when the homes were sold. “Our plan is for Australians to own their own home, not for the government and Anthony Albanese to own your home,” Mr Morrison said.

Cranbourne is also a high amount of mortgage stress. Picture: Andrew Henshaw

If the scheme was already in place, the government would have kept $179,000 on an average Victorian home bought for $506,000 in 2011 and sold for $956,000 last year. It would also mean that the government would keep a cut of any value-adding renovations.

But the housing industry welcomed the commitment, with Property Council boss Ken Morrison saying it would help buyers enter the market but was appropriately targeted to avoid driving up prices.

National Shelter chief executive Emma Greenhalgh agreed, and particularly praised its “potential attractiveness” for people looking to re-enter the market – such as older women after a family separation – as well as first homebuyers.

The Property Council also praised Labor’s proposed housing supply and affordability council – as long as its state-based targets for new dwellings were matched by proper incentives and consequences.

Originally published as Melbourne suburbs suffering worst mortgage stress