The majority of Australians don't own their own home and many are struggling to keep up with rent or mortgage payments. Most mortgage holders would be in some financial stress if interest rates were to go up by 2 percentage points.
27% of Australians own their house outright with the majority of Australians are currently either paying rent or paying off a mortgage.
One in five Australians (20%) said they are falling behind in their payments or struggling to keep up.
18% Australians reported that they spent less on essentials to help meet their mortgage or rent payments.
If interest rates were to increase by two percentage points, the majority of mortgage-holders would be in at least some financial stress.
Just over a quarter (27 per cent) of all Australians own their house outright, with a further 29 per cent living in their own home, but paying off their mortgage. 28 per cent of Australians are renting from a private landlord, six per cent rent from a public housing authority, eight per cent live rent-free, and two per cent in some other housing (mostly boarding with parents or friends).
The majority of Australians aged 45 and older live in a house that they either own outright or are paying off their mortgage. Most of those 55 own their home outright.
Young Australians are disproportionately likely to be living rent free or renting from a private landlord. Those aged 18-24 were more likely to be living rent free, while 25-34 year olds were more likely to be renting.
The majority of Australians face some level of stress when it comes to maintaining their mortgage or rental payments. One in five report difficulty keeping up with the payments, saying they are either falling behind or that payments are a ‘constant struggle’, with an additional two in five Australians reporting they ‘struggle from time to time’. Just fewer than 40 per cent of Australians are able to keep up without any difficulty.
In order to keep up with payments, over the last year, Australians have most commonly economised on luxuries (28 per cent) followed by economising on essentials (18 per cent). Around 30 per cent of Australians took up more work or went back to work (16 per cent working longer hours; nine per cent starting or returning to work and five per cent getting a second job). In addition 6 per cent of Australians took no action to help meet their repayments.
People also sold other assets (five per cent), renegotiated mortgage terms or payment conditions (five per cent), considered selling and buying something else less expensive (five percent), postponed having a child/more children (five per cent), borrowed from extended family (four per cent), delayed getting married (three per cent), took in tenants/ boarders (two per cent), put the house on the market (two per cent) and rented out property which they intended living in (two per cent).
If there was to be an interest rate hike of two percentage points, the majority of mortgage-holders in Australia would be under financial stress, with 70 per cent facing at least ‘some’ financial difficulty. Around a quarter of Australians would face ‘a lot’ or ‘quite a bit’ of financial difficulty in the event of a two percentage point interest rate rise, while 28 per cent would face no additional difficulties.