These are the Australian suburbs under the most mortgage stress — and nearly all of them have one thing in common

Queensland is feeling the most mortgage strain. (Adrian Greeman, Construction Photography, Avalon, Getty Images)
  • New analysis by credit rating agency Equifax has revealed which suburbs are facing the most mortgage stress.
  • Queensland dominates the list with nine of its tourist destinations in the top ten.
  • In terms of the sheer number of mortgage deferrals, Victorian suburbs on the fringes of Melbourne are over-represented.
  • Visit Business Insider Australia’s homepage for more stories.

More than 413,000 Australians have frozen their mortgages across the country but many call the same suburbs home.

Looking at the first wave of deferrals from May, Equifax analysis shows that nearly all of the ten suburbs under the most mortgage stress are one key thing in common.

“The impact of the downturn on tourist trade is acute for Australians living in tourism-dependent Queensland regions,” Kevin James, Equifax advisory general manager, said.

Having shut up its borders during the pandemic, the Sunshine State has seen tourism take a hard fall, with the disappearance of visitor dollars having major repercussions for the state economy and for nearby homeowners.

They naturally weren’t alone in sharing in the pain. As Airbnb and other short-term bookings dried up, investors have seen their own incomes dry up.

As a result, it’s no shock that Queensland biggest, and most beautiful, holiday destinations occupy the top eight spots.

Whitsunday, home to those white sand beaches, takes out the number one spot with more than 10% of mortgages deferred, and closely followed by Noosa on the Sunshine Coast.

The Gold Coast then dominates the list with Surfers Paradise, Coolangatta, Mudgeeraba-Tallebudgera, Southport and the Hinterland all coming in hot. Throw in North Cairns and it’s clearly Queenslanders that are the most worried about their loans.

“Tourism is a major industry for Queensland, and with international and domestic visitors curtailed during the pandemic, tourist hotspots have faced reduced occupancy rates, lower incomes and higher levels of unemployment leaving mortgage holders feeling the pinch,” James said.

“With the Queensland border beginning to reopen to parts of NSW and SA this week, we expect to see a bounce back as tourism dollars start to flow back into the
region.”

In fact, despite all that’s been made of Victoria’s lockdown and the economic carnage associated with it, the southern state claims just one entrant in the top ten, with the airport adjacent Tullamarine-Broadmeadows.

However, that doesn’t erase the financial pain being felt by Melbournians. Looking at the actual number of deferrals, several fringe suburbs including Wyndham, Casey-South, Whittlesea-Wallan, Melton-Bacchus Marsh and Boroondara are all feeling the heat. According to Equifax’s figures, that handful alone represents around 24,000 deferrals alone.

While hardly tourist hotspots, Equifax puts the financial pressure down to the higher proportion of lower-income households and young people.

“For those without significant savings, it isn’t easy to service a home loan when cash flow dries up. We know Melbourne’s second lockdown will have further exacerbated the difficulties we’ve seen in our initial analysis,” James said.

Interestingly, they were joined by the Northern Perth suburbs of Wanneroo, Stirling and Joondalup, as well as inner Sydney – no doubt hurt by sky-high vacancy rates and a lapse in international students and migrants.

While the young might be licking their wounds, it looks like it’s been those aged 36 to 45 years who were the quickest to choose to halt repayments.

“This group is likely to have relatively high outstanding mortgage balances and may have been harder hit with business lay-offs or lower-income from JobKeeper payments,” James said, noting the 26 to 35 age bracket wasn’t far behind.

Australian borrowers are now stuck trying to figure out how they’re going to make their repayments again. Hundreds of thousands are expected to simply defer again until January, as far as the banks are currently permitting.

What comes after that, however, is a $7 billion concern.

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