PHOTO: Digital Finance Analytics data shows the percentage of households in mortgage stress reached 37.5 per cent, which equates to 1.42 million households.(Mick Tsikas, File Photo: Reuters)
Mortgage stress levels among Australians have continued to soar amid the global outbreak of COVID-19, with data showing more than 1.4 million Australian households are now in mortgage stress and almost 100,000 could soon default on their loans.
Key points:
- Young families and first-time buyers are among those most exposed to defaulting on their home loans
- There are fears the situation will worsen when the JobKeeper subsidy and mortgage repayment holidays are removed
- Analysts predict a spike in unemployment could trigger debt servicing problems and forced sales
As Australia enters its first recession in 29 years, market analysts and economists predict that once the JobKeeper payment ends in September, and mortgage repayment holidays are over, these levels of cash-flow stressed households could quickly translate to mortgage defaults.
The latest data from Digital Finance Analytics (DFA), based on its rolling household surveys, reveal that to the end of May, the percentage of households in mortgage stress reached 37.5 per cent, which equates to 1.42 million households.
DFA principal Martin North said the study defines mortgage stress in terms of a household’s actual cashflow — incomings and outgoings.