- Outer-suburban mortgage belts most exposed to rate hikes
- High concentration of mortgaged owner-occupiers in specific areas
- Rising home values but potential challenges with listings and capital growth
The sharpest rate hiking cycle in history has left the outer-suburban mortgage belts the most exposed according to new research.
According to CoreLogic, the highest number of mortgaged owner occupiers are in Wyndham in Victoria (48% of households), Casey – South (56.2% of households), and Wanneroo in Perth (54% of households).
The top 25 areas across the country that are the most exposed to higher interest rates include nine outer suburb locations from Melbourne, five in Perth and Sydney and two in Adelaide.
The remaining four are large regional centres, including Ormeau-Oxenford on the Gold Coast, Geelong, Newcastle and Townsville.
The markets that are most exposed are typically further from the CBD – ranging from Stirling in Perth (9 km) to Wyong in the Central Coast of NSW (70 km).
As of the 2021 Census, median weekly household incomes across these markets had a sizable range, from $2,722 per week across Blacktown – North in Sydney, to $1,364 in Salisbury in Greater Adelaide. However, 16 of the 25 regions had a median weekly household income that was lower than the respective greater capital city or region.
Mortgage belt prices rising
Head of Research at CoreLogic, Eliza Owen said that average home values in these mortgage belt locations have risen by 3.1% since the 2021 Census, compared to national housing market growth of just 1% in the same period.
However, there is a large range in capital growth performance from 40.5% in Salisbury, to -8.9% in Gosford.
“Capital growth trends across these markets are an important consideration in the financial stability of the Australian housing market”, said Owen.
“This is because in the event of a ‘forced sale’, growth in home values allows a seller to come away with some capital gain, or allows a mortgagee in possession to recuperate the entirety of debt on a property.”
Listings on the rise
Owen said that new listings volumes are climbing in some of these markets, where the national trend is seeing a seasonal slowdown.
“Across the Blacktown – North market, new listings have increased from 185 in the four weeks to May 2023, to 230 in the past four weeks.”
“Total listings are still low relative to where they have been in the past five years, but the monthly median time on market across Blacktown – North has been rising since February, which may lead to an accumulation of total stock as interest rates continue to climb and buyer uncertainty increases.”
Owen said another market that holds some uncertainty is the Melton – Bacchus Marsh region of Melbourne.
“Total listings are elevated relative to where they have been historically, and the flow of new listings has increased steadily to 312 new properties for sale in the four weeks to 18 June (up 8.7% from four weeks ago).”
“On the other hand, the western suburbs of Melbourne have seen remarkable population growth in recent years, are a popular destination for overseas migrants, and while home values still fell in the three months to May, the pace of decline has been easing.”
Most owner occupier households with a mortgage
|
GCCSA |
SA3 Region Name |
Owner Occupier households with a mortgage – August 2021 | Change in home values | Listings performance | |||
| Number | Portion of households | Since August 2021 | Past three months | Change in total listings relative to previous five-year average | Change in new listings past four weeks | ||
| Greater Melbourne | Wyndham | 43,807 | 47.80% | 1.80% | -0.30% | -9.60% | 10.00% |
| Greater Melbourne | Casey-South | 38,614 | 56.20% | -2.10% | -0.20% | -22.80% | 6.10% |
| Greater Perth | Wanneroo | 38,320 | 54.00% | 8.40% | 1.70% | -47.00% | -5.60% |
| Greater Melbourne | Whittlesea . Wallan | 37,864 | 45.50% | -2.60% | 1.20% | -10.80% | 1.40% |
| Greater Melbourne | Melton Bacchus Marsh | 32,079 | 51.90% | -0.90% | -1.10% | 20.60% | 8.70% |
| Greater Adelaide | Onkaparinga | 29,721 | 43.30% | 29.30% | 2.40% | -45.60% | 6.40% |
| Greater Melbourne | Tullamarine – Broadmeadows | 29,215 | 47.60% | -2.80% | 0.60% | -12.40% | -11.60% |
| Greater Perth | Stirling | 28,908 | 35.00% | 2.80% | 2.50% | -33.20% | 6.00% |
| Rest of Vic. | Geelong | 28,002 | 34.60% | -4.50% | -1.80% | 11.70% | -7.10% |
| Greater Perth | Swan | 27,549 | 54.20% | 5.70% | 3.30% | -45.50% | -5.80% |
| Greater Melbourne | Yarra Ranges | 26,767 | 48.20% | -7.80% | 0.80% | -8.60% | -23.00% |
| Greater Perth | Joondalup | 26,348 | 45.60% | 8.20% | 3.10% | -39.30% | -7.30% |
| Rest of Qld | Townsville | 24,988 | 35.70% | 7.50% | 0.90% | -33.90% | 3.30% |
| Greater Melbourne | Knox | 23,563 | 41.00% | -6.90% | 2.20% | -27.90% | 33.90% |
| Greater Sydney | Blacktown North | 23,343 | 55.50% | 3.40% | 4.60% | -13.50% | 24.30% |
| Greater Sydney | Gosford | 23,223 | 33.90% | -8.90% | -0.50% | -24.50% | 5.90% |
| Greater Perth | Rockingham | 23,053 | 47.60% | 16.20% | 4.00% | -48.20% | -13.50% |
| Greater Sydney | Campbelltown (NSW) | 22,996 | 39.90% | 0.80% | 1.80% | -26.00% | -2.40% |
| Greater Melbourne | Mornington Peninsula | 22,504 | 34.80% | -6.50% | 0.90% | -0.10% | 5.50% |
| Greater Sydney | Penrith | 22,330 | 40.70% | -1.70% | 1.70% | -27.60% | -6.40% |
| Rest of NSW | Newcastle | 22,055 | 31.50% | 2.00% | 1.80% | -16.80% | 11.90% |
| Greater Melbourne | Frankston | 21,907 | 41.30% | -7.10% | 0.80% | -13.60% | -4.20% |
| Rest of Qld | Ormeau . Oxenford | 21,823 | 42.80% | 15.80% | 2.30% | -42.90% | -3.00% |
| Greater Sydney | Wyong | 21,525 | 34.10% | -4.40% | 2.80% | -27.00% | 0.50% |
| Greater Adelaide | Salisbury | 20,971 | 40.50% | 33.10% | 3.90% | -46.10% | -12.10% |
Source: CoreLogic
