The Uneven Map
Four rate rises in nine months have not landed evenly. National arrears remain low, but a handful of outer-suburban postcodes carry several times the national rate, and they sit where this cycle’s buyers stretched furthest.
Ratings agency S&P Global puts the national share of prime home loans more than 30 days in arrears at 0.85 per cent in June 2026. Pakenham, on Melbourne’s south-eastern fringe, reads 2.88 per cent on the same measure. Constitution Hill in Sydney’s west sits at 2.42 per cent, Point Cook in Melbourne’s south-west at 2.40, and Baulkham Hills in the north-west at 2.26. Pakenham carries almost three and a half times that.
S&P’s Erin Kitson attributes the pattern to younger borrowers carrying more debt against their income, with less time to build savings.
The Squeeze Behind It
The cash rate has sat at 4.60 per cent since 30 September, the highest in 15 years, after the Reserve Bank lifted it a fourth time this year. The next test is 3 November, where futures pricing implies close to a one in four chance of another increase, and one more effectively priced by May 2027.
The household effect shows up in the interest bill. In early 2022, 2.6 per cent of household income went on interest repayments. KPMG analysis of ABS data puts it near 5.8 per cent across the most recent three quarters, roughly double what households carried before tightening began.
Rebecca Dalton, who arranges mortgages at Two Red Shoes, describes the trade-offs behind those numbers.
“Their lifestyles are rubbish, but they’re doing anything they can to protect their home.”
Where The Market Has Gone
Both cities are falling faster than the national picture. Cotality’s September index has Sydney 7.0 per cent lower than a year ago with a median of $1,198,596, and Melbourne down 6.2 per cent at $780,550. Cardinia, covering Pakenham and Officer, is 2.6 per cent lower across twelve months, and Wyndham, which takes in Point Cook, is down 2.1.
Stock is building behind those falls. SQM Research counted 276,839 national listings in September, up 21.6 per cent on a year earlier. Listings older than 180 days rose 10.5 per cent, and distressed listings reached 4,872, up 29.2 per cent. Officer South has more than half its listings sitting past the 180 day mark.
The Figure Being Repeated That Does Not Hold Up
Several reports this month have put negative equity at roughly one mortgage in twenty, five times higher than before. The primary sources say something narrower.
The Reserve Bank’s Financial Stability Review, released 1 October, has negative equity below 1 per cent of loans today. It models roughly 5 per cent only if prices fall a further 20 per cent from here. The five-fold jump comes from research into the 5 per cent deposit scheme, where households in negative equity went from 87 in July to 480 in August. A real finding about a small cohort, not the mortgage book.
What To Watch
Ratings agency Fitch, which assesses the risk in Australian mortgage books, expects prices to fall between 7 and 9 per cent from its peak, and its analyst Declan Murch expects the strain to stay confined to individual households.
The next clear signal is 3 November. Until then, the useful question for anyone buying or holding in these postcodes is the local one: how much debt a suburb is carrying, how long its homes sit, and what a property costs to run. That is the work MapView does, postcode by postcode.
