Media Release 3 September 2020
Outer suburbs facing an avalanche of mortgage defaults and financial stress
Australia’s outer urban growth areas are facing an avalanche of mortgage defaults and financial stress amidst a recession, shrinking levels of income support and the end of mortgage repayment moratoriums. The National Growth Areas Alliance (NGAA) is today calling on the Federal Government and National Cabinet to focus on the great need in growth areas for job creation and other economic investment, along with long term shifts in cities policy.
In a growth areas economic summit held today, councils representing the 5 million people who live in the outer suburbs of Australia’s major cities heard that mortgage stress and rental stress levels are already high in outer urban areas, with some postcodes witnessing 90% of home owners under significant financial stress.
“Growth areas already experienced a significant level of mortgage stress before COVID-19. Job losses, the economic downturn and mortgage moratorium whiplash will compound financial stress in already vulnerable communities,” said NGAA Chair, Cr Matt Deeth (Mayor of Wollondilly Shire Council, NSW).
“Reaching the point where a household defaults on their mortgage or can no longer pay their rent doesn’t happen overnight. Those households will be accumulating more debt, trying to keep a roof over their heads while they deal with unemployment, underemployment and the widespread effects of the pandemic and recession,” said Cr Deeth.
During the summit, Martin North, Digital Finance Analytics, said that:
Twenty percent of Australia’s population lives in the outer suburbs. They already experience high mortgage stress, high transport costs, long commutes and limited access to the services and facilities that others take for granted.
“This problem is just starting to unfold and is much deeper than it appears. We must focus on outer urban growth areas in economic investment and job stimulus plans or risk further entrenching disadvantage, through mass mortgage defaults, higher unemployment, reduced access to affordable housing and worsening infrastructure deficits,” said Cr Deeth.
Watch video of economic summit here: https://youtu.be/8Ay3mWTPGPY
The NGAA represents Councils from outer urban growth areas around Australia’s major cities, home to more than 5 million people. www.ngaa.org.au
Digital Finance Analytics combines primary consumer research, industry modelling and economic analysis to offer insight into the mortgage lending and financial industries.
WEstJustice community legal centre provides free legal help to people in the Western suburbs of Melbourne for problems including debt and tenancy issues.
Wyndham City Council in Melbourne’s outer south west is one of the fastest growing, culturally diverse and youngest municipalities in Australia.
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