More than 30,000 households in the nation’s wealthiest suburbs are facing financial stress, with hundreds risking default over the next 12 months because of soaring debts and static incomes, according to analysis of the nation’s household financial hotspots.
Hundreds of households in Sydney’s harbourside Vaucluse, where the median property price is $4.5 million, or Melbourne’s bayside Brighton, where a median priced house is $2.6 million, are being severely squeezed as costs continue to stretch incomes, the Digital Finance Analytics research finds.
“A lot of people making seriously good money have borrowed serious amounts of money. The one thing that sorts them out is when interest rates begin to rise,” said Christopher Koren, a buyers’ agent for Morrell and Koren, which specialises in top-end real estate.
“When it comes to top-end household cash flow – ‘Houston, we have a problem’,” said Martin North, principal of Digital Finance Analytics, who claims lenders are making incorrect assumptions about household incomes rising to meet increasing costs.