Households under stress

With median house values between $2.6 and $3.7 million, the North Sydney and Mosman regions have long been considered some of the wealthiest in the state.

However, a new economic study has found the capacity of locals to hold on to these properties may be slipping, with housing stress in the area set to reach more than triple the forecast national average by mid-year.

The analysis, by economists Equity Economics, reveals North Shore renters and mortgage borrowers will soon be some of the most vulnerable in Australia, with the rate of those in housing stress set to rise by 72.4 per cent come June.

Traditionally, a household is considered in ‘housing stress’ when more than 30 per cent of its income is spent on housing costs like rent or mortgage repayments.

The risk factors

According to report author, Angela Jackson, high rents and house prices on the North Shore has seen couples rely on two incomes to meet housing payments.

However, with unemployment in the area predicted to hit 7.4 per cent in June, many will struggle to make ends meet.

“The North Shore is basically driven by the number of households at the moment that rely on two incomes to make their mortgage or rental payments,” she tells North Shore Living.

“If we look at rising unemployment, that means a number of those households will potentially go down to being one income families or no income families and, therefore, face housing stress.

“Whether that means they can’t make their mortgage repayments, or it just means that there isn’t a lot leftover for other expenses, then life will be a lot harder.”

She says the issue will be further exacerbated come March, when the Federal Government will scrap the JobKeeper wage subsidy and the $150 per fortnight supplement to the JobSeeker unemployment benefit.

“When the pandemic hit, the Federal Government recognised that the JobSeeker rate wasn’t an adequate an amount of money to live off, so they doubled the payment and have been slowly reducing it,” she explains.

“When that goes completely, a lot of Australians are going to face an insecure future,” she warns.

Her words are supported by the figures, with the Federal Government showing Warringah, which includes Mosman, and North Sydney rank in the top three electorates nationally for percentage increase in JobSeeker recipients since the start of the pandemic. 

In Warringah, there has been a 340 per cent spike in those on the unemployment benefit, or 3,508 more recipients than in December 2019. 

Meanwhile, in North Sydney there has been a rise of 335 per cent, or 3,615 recipients.

While the government has highlighted these large percentage jumps are somewhat skewed due to the low number of locals that received the payment prior to COVID-19, it does admit the ‘increases do show that even prosperous areas have been affected’. 

Ms Jackson says the fact that 45 per cent of North Sydney residents currently live in private rental accommodation, while the highest population group is 20 – 29 years, also pose a risk. 

“What we know with renters is they also tend to be lower income earners and younger people. 

“If you lose your job and you’re renting a certain property, you simply can’t afford it on reduced JobSeeker. Therefore, you’re going to be under housing stress.”

JobSeeker the key

Ms Jackson says fundamental to keeping locals in their homes is a permanent increase in the JobSeeker payment. 

She is calling on the Federal Government to avoid dropping the maximum rate back to $238 per week on March 31, warning such a move could see the risk of homelessness in North Sydney rise by 24 per cent.

“Upping JobSeeker is the main one, so that it is at a rate that people can afford to get by and continue to live comfortably,” she says.

“We’re not expecting it to be an opulent life, but certainly that you can rent a one-bedroom apartment and afford decent food and access the internet.”

Her words have been echoed by member for Warringah, Zali Steggall, who says she has already been approached by local not-for-profits reporting some residents are foregoing food to meet housing payments.

“I know the government takes the view that the assistance can’t be so much that people are too comfortable and staying on it indefinitely, but my experience of people that I’ve spoken to is that they are doing everything they can to find employment,” she tells North Shore Living.

“Actually, there is evidence too little support ends up holding them back from being able to enter the workforce, as it curbs their ability to get to a job interview.”

Local member for North Sydney Trent Zimmerman was also approached for comment but had not responded at the time of print.