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.
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 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.
When the census was taken last year official interest rates were at a pandemic-induced emergency low of just 0.1 per cent. The Reserve Bank has since lifted the benchmark official cash rate by 0.75 percentage points in a bid to check rising inflation. Many forecasters predict official rates could climb to around 2.5 per cent, or higher, by the first half of next year.