Post Code Level Household Financial Stress: You Asked, We Answered!

Here we answer viewers specific post code requests, following our recent show discussing Household Mortgage, Rental and Financial stress last week “Many Households Are In Trouble – Mate!” https://youtu.be/np4H9RkPqEo

We covered the following (in order):

Hornsby 2077
Mackay 4740 and 4700
Morphett Vale 5162
Busselton 6280
Robertson 2577
Sunnybank Hills 4109
Kew 3101
Kempsey 2440
Moorland 2443
Toowoomba 4350
Mount Hutton 2290
Liverpool 2170
Morayfield 4506
Holland Park 4121
Springwood 2777
Frankstown 3199, 3200
Surfers Paradise 4217
Bayview Heights 4868
Woree 4868
Cambelltown 2560
Whyalla 5600

On Tuesday 13th February in our live show we will discuss this further, so if you have additional requests for post code level analysis, drop them in the chat.

You can get more info about our One to One service here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Post Code Level Household Financial Stress: You Asked, We Answered!
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Post Code Level Household Financial Stress: You Asked, We Answered!

Here we answer viewers specific post code requests, following our recent show discussing Household Mortgage, Rental and Financial stress last week “Many Households Are In Trouble – Mate!” https://youtu.be/np4H9RkPqEo

We covered the following (in order):

Hornsby 2077
Mackay 4740 and 4700
Morphett Vale 5162
Busselton 6280
Robertson 2577
Sunnybank Hills 4109
Kew 3101
Kempsey 2440
Moorland 2443
Toowoomba 4350
Mount Hutton 2290
Liverpool 2170
Morayfield 4506
Holland Park 4121
Springwood 2777
Frankstown 3199, 3200
Surfers Paradise 4217
Bayview Heights 4868
Woree 4868
Cambelltown 2560
Whyalla 5600

On Tuesday 13th February in our live show we will discuss this further, so if you have additional requests for post code level analysis, drop them in the chat.

You can get more info about our One to One service here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Many Households Are In Trouble – Mate!

We walk through the latest from our surveys and modelling ahead of our live show which will be on 13th February 2024 at 8pm Sydney where we will look at specific post codes in more detail.

Household financial stress continues to bite, and is spreading into many different types of communities.

Ahead, we do not expect cash flow to improve for many, as mortgage rates will not be falling very soon, the costs of living continue to rise and income growth in real terms is muted, at best.

If you want data on a specific post code, put it in the comments and I will either cover it Tuesday week, or via a separate show.

If you want to get the full data set, this is available via Patreon: https://www.patreon.com/DigitalFinanceAnalytics

Our One to One Service is also available: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Many Households Are In Trouble - Mate!
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DFA Live Q&A HD Replay: Latest Household Financial Stress Modelling And Analysis

This is an edited version of my latest live discussion as I explore the latest from our surveys, with a focus on post code level analysis.

Original live stream and chat here: https://youtube.com/live/f_3K6ehCqvg

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
DFA Live Q&A HD Replay: Latest Household Financial Stress Modelling And Analysis
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DFA Live Q&A HD Replay: Latest Household Financial Stress Modelling And Analysis

This is an edited version of a live discussion about our latest financial stress modelling and analysis.

Original live stream here: https://youtube.com/live/bBujFeWj6JM

If you want a specific post code dataset, contact me via the DFA Blog. https://digitalfinanceanalytics.com/blog/

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
DFA Live Q&A HD Replay: Latest Household Financial Stress Modelling And Analysis
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Regional Australia Is Another Country!

The latest from our surveys relating to households in Regional areas versus Suburban and City areas with a focus on the use of branches, and access to cash.

We find that regional areas are much heavier users of branches and cash, relative to other areas – and Canberra in particular.

This may well explain why those based in the ACT are so far removed from the real issues faced every day by regional households and businesses.

Time to get the Senate to start their review, as I discussed with Robbie Barwick in my live show recently. https://youtu.be/OijlQNTVwtU

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Mortgage Stress Update November 2022

In our final update of the year, we incorporate the latest from our surveys as we assess the impact higher interest rates are having on households across the country, based on our rolling 52,000 omnibus survey.

And the news is not good, in that both mortgage stress and rental stress – defined in terms of cash-flow in and out, continues to grow, following the eighth rate hike from the RBA, which was promptly passed on to households by way of higher mortgage rates, (though not reflected to the same extent in higher deposit account rates I might add). There was also a continued rise in average rents, thanks to intense competition, lower supply and leveraged investors. All this set against an average inflation rate expected to hit eight per cent soon.

There are many different definitions out there (from 30% of income, or taxable income; through to underwriting metrics) but we define stress in CASH FLOW terms. If households have more outgoings (excluding one off discretionary items) than income, we define them as stressed. If they have a mortgage, they are in mortgage stress; if renting then rental stress.

Investors with cash flow pressures are identified as stressed investors. We also aggregate the data to estimate total financial stress.  Each expressed as a % of households, and count. The latter is the best measure in our view.

This month, more than 1.75 million households with an owner-occupied mortgage, or 45.8% of borrowers register as stressed, while more than 1.88 million renting households, or 60.85% are stressed. And the household debt to income remains very high, as reported by the RBA.

Analysis By State

In this slide, we highlight in yellow where the proportion of households in stress rose compared with last month, blue means a fall, and no highlight means no change. Tasmania and South Australia are now vying for top spot, both with more than half of household in a negative cash flow situation. WA and Victoria follow on, then NSW and the other states.

Rental stress is most significant in NSW, ACT and QLD. Investor stress is highest in NSW, because many investors are over-geared and experiencing significant rate hikes. Overall financial stress (an aggregated measure reveals that the state with the highest proportion of household in financial stress is the ACT.

Analysis By Cohort

We analyse our data by different household segments or cohorts, as this provides an important lens to understand what is playing out across the country.

Mortgage stress is highest among Young Growing Families (which include many First Time Buyers) at 84.69%. We see also large counts of those on the Urban Fringe, as well as some more affluent households exposed. Rental stress is highest among first generation migrants at 69.49%. Investor stress is highest among Young Affluent households and overall financial stress is highest among Young Growing Families.

Whilst we continue to see stress building in the high growth suburbs, where many purchasers entered the market when mortgage rates were around 2%, we continue to see pockets of stress across different areas, including some which would generally be regarded as more affluent. Many households in these regions have large mortgages.

It is worth reflecting on the fact that about one quarter of mortgage holders have so far been insulated from mortgage rate rises because they are on fix term loans. However, many of these are due to reset next year, as the RBA showed in a recent report.

The expectation is that rates will still be high through 2023, and that mortgage delinquencies will rise, at the same time a property prices continue to slide. This is a perfect storm.

Post Code Analysis

We list the top post codes in each category, based on the COUNT of households.

Conclusions

We do not expect things to ease ahead, as interest rate rises continue to work though, and rental costs rise. Inflation is running hotter than expected, and the RBA still expects a peak around 8% but also staying high through 2023. As a result, households need to get to grips with their cash flow and prioritise important payments, such as mortgage and rental payments, over other perhaps less critical payments.

Households under mortgage pressure would do well to talk to their bank who do run hardship schemes designed to assist in times of crisis.

We also recommend the Government Debt Help Line on 1800 007 007 for people seeking unbiased free advice.

Finally, real wages growth remains below inflation, so households must consider the scenario where true incomes continue to shrink in real terms. As a result, stress levels will remain high for some time yet.

First Take: Mortgage Stress July 2022 [Podcast]

This is a first take on the latest results from our models, which shows a further rise in mortgage and rental stress (defined in cash flow terms) across Australia. We examine the high-level results by state, segment and post code, and also present the latest stress heat maps, which highlight the growth of pressure in the newly developed zones across the country, as well as in some regional communities.

Stress has risen thanks to rising costs of living, increasing mortgage and rents, while real incomes continue to fall. We also include some suggestions as to how to manage stress.

Call the National Debt Helpline on 1800 007 007 for free and confidential advice from professional financial counsellors. But be careful of those offering advice for a fee, it is big business, and many who are struggling are being conned.

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
First Take: Mortgage Stress July 2022 [Podcast]
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The Bank Of Mum And Dad Is Getting Strangled! [Podcast]

We examine the role of the Bank of Mum and Dad, in the light of the latest data. As well as highlighting inter-generational issues, there are pressures on both parents and their kids. And if you do not have “wealthy” parents the chances of getting into the property market is diminished significantly.

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
The Bank Of Mum And Dad Is Getting Strangled! [Podcast]
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DFA Live Q&A: HD Replay Household Stress And Scenarios [Podcast]

This is an edited version of our latest live Q&A as I discuss the latest from our surveys and models, as we look at the latest mortgage stress and scenarios. You can ask a question live – down to a specific post code.

Original live show here: https://youtu.be/CCIym9IPamk with chat replay.

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
DFA Live Q&A: HD Replay Household Stress And Scenarios [Podcast]
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