The Sydney marginal seats most exposed to rising interest rates

The UNSW study, published by the City Futures Research Centre in September, used a rolling sample of 52,000 households to determine levels of financial stress among mortgagors and renters.

Three hotly contested marginal seats with a high share of financially stressed mortgagors were in the outer suburbs of Sydney –Greenway (ALP +2.8) and Lindsay (Lib +5) and Werriwa (ALP +5.5).

Professor Hal Pawson from the University of NSW’s City Futures Research Centre said those outer metropolitan regions have a high concentration of recent first home buyers who are especially vulnerable to rising interest rates because they have not had the opportunity to build up much equity in their property.

“This is the part of the mortgage holding population that we need to be concerned about,” he said.

“The Reserve Bank says that, on average, the home-owning population of Australia is in a strong position. They have built up savings, they are way ahead with their repayments, and they have got a big buffer. That is true, but that’s a bit over-reassuring because it hides the fact there’s a substantial cohort of recent first home buyers who are not in that situation.”

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NSW government data shows Greenway, Lindsay and Werriwa all have a high share of beneficiaries receiving state government first home buyer support during the past year. In the Greenway, where 62.6 per cent of those with a mortgage were experiencing financial stress, Domain Group data shows the median house price has reached $1.14 million which is 47 per cent higher than at the last election.

Almost 43 per cent of those with a mortgage were experiencing financial stress in the nearby battleground seat of Lindsay where the median house price has risen 35 per cent during the past three years to $860,000.

In the Liberal-held inner-west seat of Reid, which is being targeted by Labor, the UNSW study identified almost 40 per cent of mortgagor households under financial pressure.

There were also high rates of financial stress among borrowers in the Hunter Valley marginal electorates of Paterson (ALP +5) and Hunter (ALP+3).

Phibbs said buyers who entered the housing market in the past six to nine months would be the most anxious.

“Their repayments would have looked ok at the time, but they have got pretty humungous sized mortgages,” he said. “They have probably got a bit of headroom, but maybe not stacks of headroom. For that group, their anxiety will go up if rates rise.”

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