RICH SEA OF DEBT
Surfers residents owe most
RESIDENTS in the city’s most affluent suburbs are in a sea of debt, with warnings the slightest change in interest rates will see them go under.
Those living in Surfers Paradise and surrounding suburbs have an average debt-toincome ratio of nearly 600 per cent, more than three times the national average and the worst in Queensland.
Tugun, Broadbeach, Paradise Point and Burleigh are trending above 480 per cent, according to data compiled by Melbourne firm Digital Finance Analytics.
THE Gold Coast’s most affluent suburbs are swimming in a sea of debt, with warnings the slightest change in interest rates will see them drown.
Surfers Paradise and its surrounding suburbs are the worst off, with the average of total debt to income ratio sitting at nearly 600 per cent, more than three times the national average and the worst in Queensland.
Also heavily leveraged are Tugun, Broadbeach, Paradise Point and Burleigh, all of which sit at higher than 480 per cent.
The figures, compiled by reputable Melbourne firm Digital Finance Analytics (DFA), reveal the economic state of play in the 4217 postcode, which takes in Surfers Paradise, Sorrento, Isle of Capri, Main Beach and Benowa and is home to some of the city’s most powerful figures.
Economists and demographers have described the figures as “startling”, with DFA boss Martin North warning that Gold Coast owneroccupiers faced a rough road ahead.
“The figure of 596 per cent is especially large and it’s pretty amazing because there is not a postcode higher than that in Queensland,” he said.
“It is a sign of the risk ahead and shows there is not much in the way of wiggle room so if interest rates rise and household prices slide at all then these households will be under significant pressure.
“There are many households which are leveraged up to their eyeballs and taking on more debt to manage their way through this horrible situation where income is flat, the cost of living is rising and the costs of energy are going up with no prospect of a pay rise.”
According to the data, the average net worth of residents in the 4217 postcode is $1.1 million while the average total outstanding on mortgages is $821,077. The average of mortgage loans to income is sitting at 5.4.
The average annual debt payments are $45,838, the city’s highest, with those in 4216, which takes in the Sovereign Islands and Paradise Point, just behind.
Respected Sydney demographer Mark McCrindle said the figures were startling and presented a warning for the future.
“Nationally the average is about 190 per cent so the figures (for 4217) are more than twice the national average,” he said.
“At the moment much of this debt is easy to carry with record low interest rates. All the pundits say the RBA will move to change this later this year or early in 2019 so this makes Surfers Paradise a serious watch area. The slightest pressure on the economy will put pressure on them.”