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Mortgage stress on the rise among Aussie home owners

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Rising rents and mortgage repayments are taking their toll on the lives of many Aussie home owners, according to a new research. Recent studies conducted by the Australian National University (ANU) National Centre for Social and Economic Modelling (NATSEM) show that the number of private renting households in housing stress will increase alarmingly by 38% or 108,500 over the next four years based on the private rents rising by 6% a year. Ron Silberberg, managing director of HIA, warned that deteriorating housing affordability, if left unchecked, could lead to an escalation of poverty and homelessness in the country, as it would place unmanageable pressure on lower-income families. "There are now more than half a million households who are paying more than 30% of their income in rent or mortgage repayments. Record low vacancy rates in rental accommodation and the resulting rent auctions are pushing lower-income Australian households closer to the poverty line," he said.
TOTAL NUMBER OF HOUSEHOLDS IN HOUSING STRESS
 
State
NSW
Vic
Qld
SA
WA
Tas
ACT/NT
Australia
Number of rentals
224,256
112,700
140,735
25,261
29,015
6,227
8,806
547,000
% renting and mortgage households
in housing stress
27%
18.4%
26.8%
12.9%
11.8%
10.2%
14.6%
22%
Source ABS, HIA
It's not all doom and gloom, however, as a recent study from Wizard Home Loans indicates that the tightening rental market is now encouraging investors to put money back into residential property. The study, entitled 'Tomorrow's Property Investors', revealed that the number of Australians planning to buy investment property was up 35% to 779,000 in the quarter to December 2006. "Almost 60% of Australians who intend to purchase an investment property in the next 12 months are currently not in the market. The appeal of high returns has helped lure borrowers into the property investment market," says Mark Bouris, chairman of Wizard Home Loans.

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