Sydney’s housing stress hotspots revealed

One in four home borrowers across large parts of Sydney’s west and south-west were already paying more than 30 per cent of household income to service their mortgage before this year’s interest rate increases.

These housing stress hotspots will soon come under added financial pressure with the Reserve Bank expected to hike interest rates by 0.5 of a percentage point on Tuesday, taking the benchmark cash rate to a three-year high of 1.35 per cent.

The 2021 census, conducted last August and released last week, revealed seven Sydney local government areas disproportionately exposed to higher borrowing costs: Burwood, where 25.9 per cent of home borrowers were already paying over 30 per cent of household income on mortgage repayments, Canterbury-Bankstown (25.6 per cent), Fairfield (25.4 per cent), Cumberland (24.7 per cent), Parramatta (24.3 per cent) and Georges River (23.9 per cent).

Those spending more than 30 per cent of household income to service a mortgage or pay rent have traditionally been defined as being in housing stress, especially households among the lowest 40 per cent of earners.

The census also identified suburban pockets with an especially high share of pressured borrowers. In south Campsie, four in 10 home borrowers (38.8 per cent) were paying over 30 per cent of household income on mortgage repayments. In many other suburbs across Sydney’s west and south-west, the proportion was around one-third, including Hurstville central (32.6), Guildford-South Granville (32.9 per cent) and Minto-St Andrews (32.3 per cent).

The share of renters under financial pressure due to housing costs in some suburbs was even higher. In Fairfield, 55 per cent of tenants were paying over 30 per cent of household income on rent, while in Greenfield Park-Prairiewood the share was 52.3 per cent and in Condell Park 51.7 per cent.

Sydney University professor of urban and regional planning, Nicole Gurran, said the census figures showed much housing stress was highest in lower-income districts of the city.

“That’s not unexpected, but it is very stark,” she said.