A survey of 1,008 Australians conducted by Roy Morgan on behalf of the Salvation Army has found that one in three respondents were “likely to struggle” to pay off their home loan if interest rates rose.
Additionally, the research revealed that almost half of Australians believe that owning a home is no longer possible, amid growing concerns over housing affordability.
The research follows an analysis of data from Digital Finance Analytics (DFA) which suggested that 51,500 borrowers could be at risk of defaulting on their mortgage in the next 12 months.
DFA principal Martin North attributed the rising risks of mortgage defaults to slow wage growth, cost of living pressures and growing size of mortgages.
Salvation Army officer Major Paul Moulds added that Australians are living under “extreme housing stress” and lack financial stability, with over a quarter of respondents (26 per cent) concerned that they “won’t have enough reasonably paid work” or a “job at all” this year, and 46 per cent worried about their financial situation.
“Two-thirds of people accessing our emergency relief services are living under extreme housing stress,” Major Moulds said.
“With more than half of their income going towards housing, many Australians simply can’t afford to save money.
“A lack of job security is also complicating people’s financial stability, pushing them further to the margins.”
Major Moulds encouraged Australians to take “preventative steps” to avoid financial stress, with 41 per cent of respondents also noting that their financial situation is affecting their “emotional wellbeing”, “family life”, “career goals” or “social life”.
“We need to remove the stigma around asking for help,” Major Moulds added. “We are urging people to take preventative steps to avoid hardship in the future. It’s clear that many Australians are not having an honest conversation about their situation and are waiting till they are in crisis before taking action.”
[Related: Fresh warnings issued over mortgage stress]
Charbel Kadib is a journalist on the mortgages titles at Momentum Media.
Before joining the team in 2017, Charbel held roles with public relations agency Fifty Acres, and the Department of Communications and the Arts.
Charbel graduated from the University of Notre Dame Australia with a Bachelor of Arts (Politics & Journalism).