HOMES SQUEEZE

A LOAN & AFRAID: Mortgage stress hits three of four in Geelong burbs

THREE out of four households in Geelong West, Herne Hill and Manifold Heights are under mortgage stress, new data reveals.

Even more alarming, half of those households are in a significant level of difficulty.

Digital Finance Analytics principal Martin North said high house prices had left many with big mortgages they hadn’t had time to pay down.

THREE out of four households in the 3218 postcode are reportedly under mortgage stress, Digital Finance Analytics data reveals.

Even more alarming was that half of those households were in a significant level of difficulty.

Digital Finance Analytics principal Martin North said it suggested mortgagees in the postcode, which takes in Geelong West, Herne Hill and Manifold Heights, would be severely affected if interest rates were to rise.

The other half of those households are enduring mild stress, which means they are just keeping their heads above water. Mortgage stress is defined as spending 30 per cent or more of your pre-tax income on your repayments.

Mr North said high house prices had left many people with big mortgages they hadn’t had time to pay down.

“They are stretching themselves to get into the market and incomes are not growing in real terms at all in that area,” he said,

Newfangle, Newtown agent Greg McDonald said it was frightening to see such figures.

“Weekend after weekend agents put a price on a house and those estimates are being blown out of the water,” Mr McDonald said.

“Buyers are paying way in excess of what anyone thinks they’re worth.”

He said a mentality had been fostered in people seeing those excessive prices at auctions every weekend that gave them confidence to pay more for fear of missing out.

Diamond Finance Geelong’s Suzie Rankine was shocked by the statistics.

Ms Rankine said people did not know how to budget and their lifestyles were over what they could afford.

“Instead of going out two to three nights a week just go out once,” she recommended as one way of saving money.

She also recommends people stay in contact with their lender and develop a relationship with them and not just bury their head in the sand and hope the problem goes away.

“Financial stress is awful. No one wants that, we are here to help, not judge,” she said.

Rene Ploegmakers, financial counsellor at Diversitat, said borrowers struggling with mortgage repayments should talk to a financial counsellor.

“There are a range of hardship options from energy suppliers and credit providers, they are obliged to offer hardship options,” Mr Ploegmakers said. “We work with people to get them through the crisis.”

“Buyers are paying way in excess of what anyone thinks they’re worth.” NEWFANGLE, NEWTOWN AGENT GREG MCDONALD