A record 24,546 Australian households are at risk of defaulting on their mortgage, with new research revealing a 24 per cent annual increase on the heartbreaking number.<\/p>\n
A report on the September quarter, published by OurTop10, revealed that mortgage pressure is now spreading beyond Sydney and Melbourne into Adelaide and regional Queensland.<\/p>\n
A default officially occurs when a borrower fails to meet their loan repayment obligations, signalling severe financial distress.\u00a0<\/p>\n
Mortgage default risk increased in 66 of Australia’s 70 ranked postcodes, according to data compiled by Digital Finance Analytics (DFA).\u00a0<\/p>\n
Despite quarterly growth slowing to three per cent, the market is still absorbing the impact of an 18 per cent jump in the June period.\u00a0<\/p>\n
OurTop10 Head of Research Mansour Soltani said the slowdown offered no comfort.<\/p>\n
“A slower quarter is not a better quarter,” he said.\u00a0<\/p>\n
“Twenty-four thousand households at risk of defaults is a record for this series, and the pressure is now spreading from the growth corridors into Adelaide and regional Queensland.<\/p>\n
“These figures don\u2019t yet capture September\u2019s rate hike, let alone this week\u2019s, and the full impact of earlier hikes is still working its way through household budgets.”<\/p>\n
Mr Soltani warned that the latest report was a “snippet” of the imminent “national crisis”.\u00a0<\/p>\n
“What we\u2019re seeing now is likely just a snippet of what will become a bigger national crisis over the next 12 months as the effects of five rate hikes start to snowball,” he said.\u00a0<\/p>\n
“Many households have already burned through their savings buffers. The real test now is how much longer they can hold on in this economic climate.<\/p>\n
“We\u2019re already seeing early warning signs, with banks reporting a rise in requests for hardship arrangements this year.”<\/p>\n
Cranbourne in Melbourne’s south east remained the highest concentration of risk in the country, with 1,364 households estimated to default.\u00a0<\/p>\n
Blacktown in Western Sydney recorded the nation’s sharpest annual increase of 76 per cent.\u00a0<\/p>\n
Across the states, South Australia recorded the most rapid momentum, with households at risk expanding by 13.6 per cent over the quarter and 31 per cent annually.\u00a0<\/p>\n
South Australia’s Encounter Bay recorded the country\u2019s largest quarterly increase, up 78 per cent from 93 to 166 households.<\/p>\n
It was followed by Glenelg North at 52 per cent, South Plympton at 38 per cent and Pooraka at 31 per cent.\u00a0<\/p>\n
The pressures come amid the Reserve Bank’s decision on Tuesday to lift interest rates to an 18-year high.<\/p>\n