MORTGAGE STRESS HITS HOME
STACEY Gwatking knows how hard it is to run a family budget in Toowoomba, especially when you have a mortgage.
She’s not alone in that, with the Garden City feeling the pinch of mortgage payments more than anywhere else in Queensland.
More than 5480 households in the 4350 postcode are considered to be in mortgage stress right now, the highest in Queensland and the fourth highest in the country, according to research firm Digital Finance Analytics’ latest report.
To make matters worse, nearly 200 of those households are at risk of defaulting on their mortgages within 12 months.
The alarming statistics are all too familiar to Mrs Gwatking, who moved to Toowoomba from Ipswich with her husband Adam and three young children about a year ago.
She said running the family’s budget was harder than ever, even with her husband working full-time.
“What we’ve noticed as opposed to Ipswich is our council rates are seemingly higher – it takes a huge chunk out of the budget, and the electricity prices are also expensive,” she said.
“We tend to shop around but we couldn’t with our power provider (because it’s a regulated market).
“House prices in general (in Toowoomba) were quite expensive, and house prices by suburbs varied.
“The three-year-old (Rhys) goes to kindy and the full fee is $100 just for one day – compared to Ipswich, the full fare has jumped up $20 a day.”
Digital Finance Analytics principal Martin North said mortgage repayments were merely a symptom of the growing issue in Toowoomba, which he said involved higher levels of underemployment, increases to households costs, and a relatively expensive housing market.
“The first observation is that incomes have been going backwards, plus the fact that underemployment is quite high,” he said.
“The second thing is money out the door, (so) council rates, cost of household expenses and power prices have come up.
“The mortgage that people have relative to their income is large – the average Toowoomba income is $5300 a month, and the average repayment is $1510.
Mr North said increased mortgage stress had a flow-on effect for local economies, since cash-strapped families were likely to spend less.
The findings from DFA were disputed by the Real Estate Institute of Queensland, who said the modelling did not match the current market in Toowoomba.
“We’re surprised at some of the conclusions in the Digital Finance Analytics modelling because the results don’t correlate with what we know of the market, which is that Toowoomba has solid fundamentals underpinning its economy,” a spokeswoman said.
“The Digital Finance Analytics modelling suggests that the average house price in Toowoomba is $490,000 but we know the median house price in Toowoomba in the first quarter of 2017 was $350,000.
“Also, DFA suggests that the average monthly income is $5300 but Census data reveals the median is $5499, so it’s unclear what assumptions they’ve used in their speculations.
“Based on this official, reliable data, it seems unlikely that Toowoomba would be leading the country for communities in mortgage stress.”
Mrs Gwatking said her family went without luxuries to keep the budget balanced.
“We’ve had to deal with a redundancy before, so that’s in the back of my mind,” she said.
“We try to safeguard as much as we can, but when you have so many responsibilities, we have to be careful with what we do spend.
“We don’t go on family holidays.”