One in four home borrowers in much of western and south-western Sydney was already paying more than 30% of household income to pay off their mortgage before interest rates rose. this year.
These housing stress points will soon be under additional financial pressure and the Reserve Bank is expected to raise interest rates by 0.5 percentage points on Tuesday, bringing the benchmark cash rate to a maximum of three years of 1.35%.
Housing stress points in Sydney will soon come under additional pressure due to higher interest rates Credit: Louise Kennerley
The 2021 census, conducted last August and published last week, revealed seven areas of Sydney local government disproportionately exposed to higher borrowing costs: Burwood, where 25.9 per cent of borrowers homes already paid more than 30 per cent of household income on mortgage repayment, Canterbury-. Bankstown (25.6%), Fairfield (25.4%), Strathfield (25%), Cumberland (24.7%), Parramatta (24.3%) and Georges River (23.9%).
Traditionally, those who spend more than 30 percent of household income to pay a mortgage or pay rent have been defined as housing stress, especially households with 40 percent lower income.
The census also identified suburban pockets with a particularly high proportion of pressured borrowers. South of Campsie, four out of 10 home borrowers (38.8%) paid more than 30% of household income for mortgage repayment. In many other western and south-western suburbs of Sydney, the proportion was around a third, including central Hurstville (32.6%), Guildford-South Granville (32.9%) and Minto-St. Andrews (32.3%).
The proportion of tenants under financial pressure due to housing costs in some suburbs was even higher. In Fairfield, 55 percent of tenants paid more than 30 percent of household income for rent, while in Greenfield Park-Prairiewood the share was 52.3 percent and in Condell Park 51.7 percent.
University of Sydney Urban and Regional Planning Professor Nicole Gurran said the census figures showed that housing stress was highest in the city’s low-income districts.
“This is not unexpected, but it is very hard,” he said.