New report reveals where South Aussies are behind on their mortgage repayments

The true impact of Adelaide’s cost of living crisis has been laid bare, with a new report revealing the South Australian suburb with the highest proportion of homeowners behind on their mortgage repayments.

The report by Real Credit Repairers listed Elizabeth, in Adelaide’s northern suburbs, as the sixth-most in arrears suburb in the nation, with Playford council recording a credit score of 640, according to ClearScore.

In Australia, a perfect credit score is either 1000 or 1200, depending on varying metrics.

According to Dennis Cowper, Director of Real Credit Repairers, the financial pressure on Australian households is no accident.

“Australians are still taking on record levels of housing debt – loan commitments remain more than 30 per cent above pre-pandemic levels,” he explains.

“People haven’t stopped borrowing, but they are stretching themselves further than ever to get into the market.”

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While the report revealed Elizabeth as South Australia’s most financially strained homeowners, it also revealed North Adelaide mortgage holders to be in the best credit health, coming in at number three on the list.

Here tenants were described as thriving because of “low mortgage stress and strong borrowing power.

Mr Cowper said the early signs of financial strain were already showing in household behaviour.

“Households are shuffling debt just to stay afloat – refinancing volumes are at record highs and personal loan commitments have doubled to $9 billion a quarter,” he said.

“That’s a clear sign people are leaning on unsecured credit to cover the basics,” he says.

S&P Global Ratings’ latest Market Overview revealed 0.66 per cent of SA home loans through with major lenders were in arrears.

This is a 0.01 per cent improvement on the same time last year.

MyBudget’s Tammy Barton. Photo: Naomi Jellicoe

MyBudget founder and director Tammy Barton said a significant number of South Australians were in financial strain due to the current cost of living crisis.

“The mortgage-to-income ratio has hit historic highs,” she said.

“Nationally, new home loans now require close to 50 per cent of the median household income to service repayments, well above the mortgage stress benchmark of 30 per cent.

“In Adelaide, it’s even greater, with new mortgages requiring 56.2 per cent of household income.

“That’s a massive shift compared to the 1980s when housing costs were only two to three times household income.”

She said she was seeing more and more people reach out for help in either reducing mortgage stress, or make proactive steps to avoid it in the future.

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“What people really need is a clear understanding of where their hard earned money is going, and a budget is really the only way you are able to gain that much needed visibility,” she said.

“Seeking help before you’re in real trouble is crucial. The longer you wait, the fewer options you have.”

Lawyer Caz Craven, from Adelaide’s southern suburbs, found herself experiencing financial stress as a law student in the wake of a divorce, and said had she not reached out for help she would have found herself in real trouble.

CazCraven used MyBudget to help her get on top of her finances. Picture: Supplied

Now a homeowner, she said without the assistance of a group like MyBudget, she would not have been able to achieve financial freedom, and her situation could have been dire.

“I basically was getting divorced at the time, so it was pretty critical that I was able to manage on my own and I was tremendously concerned,” she said.

“Without help, I wouldn’t have even got to the place of buying the house, because I would have been deep in debt, and I would’ve been just chasing my tail the whole time,” she said.

“And it’s easy to find yourself in that situation.”

– with Lydia Kellner

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