NEW economic data reveals that more than 7000 Ballarat households are in mortgage stress, and much of that has been brought on by the ongoing pandemic. Digital Finance Analytics (DFA) results to the end of May shows that more than 437,000 Victorian homeowners are now spending almost all of their income on bills and their mortgage. Of that, it is estimated that 7462 households in Ballarat have no room to move, the highest numbers in the state. READ MORE Prior to COVID-19, it was estimated that a total of 32.9 per cent of households were under some sort of mortgage stress. That figure has climbed to 37.5 per cent despite extra government programs and new bank repayments schemes over the past few months. But despite these safeguards, DFA estimates more than 200 homes in the Ballarat region are at risk of foreclosure. In the latest report, DFA principal Martin North said young families and first home buyers were the most stressed, but there was also a rise being seen in 'affluent stress'. "Stress exists across the regions, this is not just a major city story. In fact some of the most stressed areas include regional Victoria and New South Wales," Mr North said. "Nationally the most stressed post codes include Ballarat 3350, Hillside and Sydenham 3037, 6030 which includes Clarkson and Tamala Park, and 3030 Werribee and Point Cook. "Many of these areas include large swathes of relatively newly built property on small urban estates." DFA defines mortgage stress in 'cash-flow' terms meaning money-in is gross income such as salary, pension, interest and dividends, versus money-out such as tax, mortgage repayments, food, childcare, school fees and discretionary and non-discretionary spending. If cash flow is close to - or at - zero, households are in stress. If it is 10 per cent below, it means you are gaining more debt each week and you are in severe stress. Mr North said areas of high growth see people with high mortgages, but don't necessarily have the equity around them. "Of course they may have assets like deposits, or put more on credit cards, but generally households under pressure spend less, hunker down, and some, two to three years later end up selling or even defaulting. Stress indicators are an early warning sign of potential issues ahead," he said. It comes as findings from the Consumer Policy Research Centre (CPRC) in August painted a disturbing picture particularly for young Australians during the pandemic. The figures show that young Australians are three times more likely to have taken on a loan from a payday lender or consumer lease in July and twice as likely to have taken out a personal loan just to survive. Cafs chief executive Wendy Sturgess said last month she was concerned that there had not been a big uptake in the free financial counselling that could be offered to those getting into hardship since the start of the pandemic. "Sometimes young people are not aware of services on offer," Ms Sturgess said. "We also know younger people looking to pay day lenders. It appears from what we are seeing, young people are seeking those options first. "We want them to know we are here, we are happy for those to reach out and get financial counselling "It's really a significant thing to withdraw your super, and we're very concerned about the long reaching impact on them." Have you signed up to The Courier's daily newsletter and breaking news emails? You can register below and make sure you are up to date with everything that's happening in Ballarat.
