The number of mortgage borrowers considered ‘at risk’ is expected to rise as most mortgage-holders have been required to resume repayments and JobKeeper payments were coming to an end, according to Roy Morgan.
Michele Levine, Roy Morgan chief executive, said 1.54 million people were still receiving the reduced JobKeeper 2.0 employment subsidy in December 2020, with the percentage of Victoria’s pre-pandemic workforce still relying on the scheme well above the national average.
“Job losses (or “job shedding” as the Reserve Bank’s Governor put it) will result when the scheme ends on March 28, the question is just how large the gap will be between jobs lost and new jobs created,” Levine said.
“Unemployment, and specifically losing a job, is the major factor in whether or not people can pay their mortgages.
“The number of mortgage-holders considered ‘at risk’ dropped to an extremely low (in relative terms) 668,000 between July and September 2020, when government assistance was in full flow and mortgage-holders in difficulty were offered payment pauses by their lenders.
“But then the government support began to taper off, and between September and November 2020 the number of borrowers considered ‘at risk’ for mortgage stress rose to 783,000, or one-fifth of all mortgage holders.
Levine said mortgage stress was inextricably linked to unemployment: the single biggest driver of increased mortgage stress was the reduction in income resulting from job loss — that caused an immediate jump into a risk category.
“Whatever happens, we will be there tracking the data. Employment, consumer confidence and business confidence are the most critical measures signalling economic recovery, with mortgage stress and CBD movement also important metrics, particularly now,” Levine said.
“Roy Morgan will continue to do the important work of tracking this information and making the results publicly available, as we have done for 80 years. We’re here for business and the nation as a whole, as we have always been.”
