Australian homeowners are facing mounting pressure as the risk of mortgage stress increases, following a series of interest rate hikes. New research from Roy Morgan indicates that a significant number of households have been pushed into the “At Risk” category, following two interest rate increases of 0.25% in the three months to July 2023.

In the wake of these hikes, an additional 642,000 households found themselves grappling with mortgage stress. This comes after 12 interest rate rises in the past 15 months by the Reserve Bank of Australia (RBA). These increases have seen official interest rates climb from a mere 0.1% in May 2022 to their current levels.

The Australian Bureau of Statistics (ABS) has reported a drop in Australian inflation to 6.0% for the year ending June 2023, a decrease from the 7.0% recorded in the year ending March 2023. While this reduction in quarterly CPI figures is a positive development, new inflationary pressures are beginning to take shape within the economy.

The number of Australians at risk of mortgage stress has hit a record high, with the proportion still highest amongst mid-income households. More worrisome is the surge in mortgage holders who are now considered ‘Extremely At Risk’, with an estimated 1,017,000 (20.3%) households falling into this category in July 2023 – the highest number in over a decade.

If the RBA continues on its current trajectory and raises rates again by 0.25% in September, Roy Morgan predicts that those at risk of mortgage stress could exceed 1.57 million households. The firm has modelled the potential impact of two further interest rate increases of 0.25% in September and October, which could see rates rise to 4.35% and 4.6% respectively.

According to these projections, the proportion of households at risk could increase from 29.2% in July to 30.2% in September, if the RBA raises rates in the coming month. If the RBA were to raise interest rates by an additional 0.25% in October to 4.6%, this proportion could further rise to 30.7% of mortgage holders.

When analysing this data, it’s crucial to remember that interest rates are only one piece of the puzzle when it comes to mortgage stress. Other variables such as income, cost of living, and employment status also play a significant role in determining a household’s financial stability.

For those looking to navigate the current property market, seeking professional help can be beneficial. A Buyers Agent North Beaches or a Northern Beaches Buyers Agent can provide valuable insight and advice tailored to your specific situation. These experts are well-versed in the complexities of the property market and can help you make informed decisions.

Moreover, Sydney Buyers Agents can assist those looking to buy in the city’s competitive property market. With their extensive knowledge and experience, they can help you secure the best deal possible, even amidst rising interest rates.

In these uncertain times, it’s more important than ever to seek professional advice. Whether you’re a first-time buyer or an experienced investor, a Buyers Agent Lower North Shore or Northern Beaches buyers agent can provide the guidance you need to navigate the increasingly challenging Australian property market.

In conclusion, while the current economic climate may seem daunting, with the right advice and strategy, you can still successfully navigate the Australian property market. Remember, interest rates are just one factor in the broader picture – understanding all the variables at play is key to managing and mitigating mortgage stress.