Postcode 3350 in Ballarat is the nation’s most at risk.
Fears are rising Melbourne’s battler suburbs will bear the brunt of a looming mortgagee sale crisis.
Modelling by boutique financial consultancy Digital Finance Analytics shows upwards of 437,000 Victorian homeowners are now spending almost all of their income on bills and their mortgage.
More than 25,000 of that number are at risk of defaulting in the next year, according to their algorithms.
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The figures show postcode 3350 in Ballarat as Australia’s most challenged, with 7462 households living without any financial wiggle room and 244 facing foreclosure.
But eight outer-ring Melbourne postcodes feature in the nation’s top 30 by number of households in stress, including Cranbourne where 5532 are struggling and a staggering 740 are tipped to face a forced sale.
Some six-month mortgage holidays have reached the end of their time span.
DFA principal Martin North warned growth areas were particularly at risk as they had a higher proportion of recent purchasers, meaning higher mortgages and lower equity.
“High-growth postcodes are seeing high stress,” Mr North said.
“And there is a strong correlation between mortgage stress and default.”
National Growth Areas Alliance executive officer Bronwen Clark said she feared an avalanche of mortgagee sales could cause a house price crunch in some Melbourne growth areas at the end of JobKeeper when a “harsh reality will set in”.
“We would imagine in the next six months, we would see a lot of movement in the outer suburbs,” Ms Clark said.
“All of this distress will lead to lower house prices as people are selling out of desperation.”
Non-bank lender Firstmac, which has $13b in loans nationwide, figures show one in 20 of their Victorian borrowers are now in hardship arrangements, such as mortgage holidays.
Firstmac chief financial officer James Austin said the figure was closer to one in 10 for those working in professional services, retail or education and training following the stage four lockdown.
The firm would begin urging some to sell in as little as three weeks’ time, and other lenders were expected to do the same, Mr Austin said.
Melbourne’s stage four lockdown will put more homeowners at risk of a forced sale.
“There is more concern about Victoria now than any other state, and it has been softer in prices than any other state,” he warned.
Investors with multiple properties and homeowners struggling with repayments who had bought recently and had little equity would be the first to hear from their banks, he advised.
“I think banks will be urging some to sell, but I don’t expect they will be forcing them to,” Mr Austin said.
MELBOURNE BATTLER POSTCODES AT DEFAULT RISK
3977: Cranbourne – 740 homes
3029: Hoppers Crossing, Tarneit – 419 homes
3064: Mickleham, Roxburgh Park – 364 homes
3754: Doreen, Mernda – 219 homes
3429: Sunbury – 187 homes
3199: Frankston – 179 homes
3178: Rowville – 150 homes
3076: Epping – 120 homes
+ postcode 3350 in Ballarat — 244 homes
Source: Digital Finance Analytics
nathan.mawby@news.com.au
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