Mortgage stress hits western Syd

Western Sydney is one of the country’s hardest-hit areas for mortgage stress, with one in 10 households struggling to meet their mortgage payments. Western Sydney is one of the country’s hardest-hit areas for mortgage stress, with one in 10 households struggling to meet their mortgage payments, according to a new series of housing affordability indicators the federal government will release in coming weeks.

Sydney generally has a high level of mortgage stress – defined as a household having to spend 30 per cent or more of its income on mortgage payments – with 8 per cent of households in that situation, compared with the 6 per cent average of Australia’s largest cities, figures produced as part of the National Cities Performance Dashboard show.

The government’s findings are not surprising. In September, theAdelaide Bank/REIA Housing Affordability Reportsaid the proportion of income required to meet loan repayments in NSW increased by 1.9 percentage points over the second quarter to 38 per cent.

It’s not just a problem for home buyers. Across the country, one in 10 urban households is suffering rental stress – having to spend 30 per cent or more of their income on rental payments. In Sydney, the figure is 14 per cent, the dashboard figures show.

‘‘A lack of affordable housing can weigh on a city’s economic performance,’’ said Assistant Minister for Cities and Digital Transformation Angus Taylor, who will outline the results on Friday at the National Housing Conference hosted by the Australian Housing and Urban Research Institute and Family & Community Services NSW.

‘‘Low levels of housing affordability undermine social cohesion and exacerbate wealth inequality.’’

Angus Taylor says unaffordable housing has wide-ranging effects for people as well as the wider economy. PHOTO: JEREMY PIPER

The dashboard is designed to permit benchmarking between different cities, and help improve the problems of affordability that are increasingly home purchase out of reach and even preventing couples and from setting up new households because they can’t even rent affordably.

Without it, economic growth will be crippled, Wendy Hayhurst, chief executive of the NSW Federation of Housing Associations, said yesterday at the first day of the conference.

While large sums of money were needed to subsidise affordable housing

– as envisaged through the federal government’s plan to set up a bond aggregator mechanism to channel institutional investment into the sector – this was spending needed to underpin economic growth at a time of rising population and increasing household demand, Ms Hayhurst said. ‘‘Housing is a fundamental part of what’s required for a successful society,’’ she said.

‘‘What appears to be a very large sum of money needs to go into affordable housing, actually, in the medium term, is goingto bringback taxrevenues anda more successful Australia in the world.’’

The latest Rental Affordability Index, released on Wednesday, found Sydney the least affordable region in Australia, with average income households paying 29 per cent of income on rent.

The index, compiled by peak housing advocate National Shelter, Community Sector Banking and SGS Economics & Planning, found Hobart was the secondleast affordable region in Australia, with average-income households spending 28 per cent of their earnings on rent, followed by Brisbane, Adelaide (both 25 per cent) and Melbourne (24 per cent).

Mr Taylor said unaffordable housing had wide-ranging effects for people as well as the wider economy. ‘‘Households that spend more on mortgage payments or rent have less money to spend on other things – like food, electricity, transport and healthcare.’’