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New research from Roy Morgan shows an estimated 1.38 million Australian mortgage holders are deemed at risk of experiencing mortgage stress in the three months to April 2023. That’s almost one-third (27.8 per cent) of all mortgage holders in the country.
The latest figures bring Australians on par with one of the most financially turbulent times in modern memory. This is the highest number of mortgage holders considered at risk since the height of the global financial crisis in August 2008, when 1.4 million mortgage holders were feeling the pressure.
Moreover, the proportion of mortgage holders considered at risk of mortgage stress in the three months to April 2023 — 27.8 per cent — is the highest it’s been for over a decade, since October 2011, when 28.3 per cent were deemed under stress.
The latest figures represent a rapid uptick in household financial pressure, with the number of Australians experiencing mortgage stress increasing by 529,000 over the last year.
Furthermore, the number of mortgage holders considered “extremely at risk” has now increased to 881,000 (18.5 per cent of mortgage holders) in the three months to April 2023, which is now significantly above the long-term average over the last 15 years of 661,000 (15.9 per cent).
For real estate agents, it’s worth bearing in mind that the financial realities of current and prospective vendors are substantially different from this time last year.
Indeed, the cost-of-living crisis is making itself felt in buyer behaviour, too. New research commissioned by ING recently showed that Australian families are more likely to be looking for smaller, low-maintenance homes as the reality of raised interest rates and higher-than-average inflation sets in.
More than a quarter of Australian families considering buying said they believe a big home would cost too much to maintain in the current financial environment. And one of the prime motivators for a majority of 2020’s COVID-19 moves is now an aspect on which buyers are prepared to compromise: almost one in five (19 per cent) said they would opt for a home with less outdoor space.
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