Financial pressure moving beyond low-income areas into high-value postcodes, with Sydney hardest hit
Mortgage stress in Australia is no longer concentrated in outer suburban and lower-income areas, but is spreading into some of the country's wealthiest neighbourhoods.
The OurTop10 Mortgage Stress Report for Q1 2026, produced by Digital Finance Analytics (DFA), found that across capital cities, 54 postcodes recorded increases in general mortgage stress, 16 recorded rises in severe mortgage stress, and 41 saw increases in mortgage default risk over the quarter.
Sydney recorded the highest concentration of mortgage stress increases of any capital city. All 10 of its top-ranked postcodes for general mortgage stress posted increases in Q1 2026, and six of its top 10 postcodes for severe mortgage stress also rose over the quarter.
The Lower North Shore postcode 2066 — covering Lane Cove, Northwood, Riverview, Longueville and Linley Point — recorded the largest increase in severe mortgage stress nationally, surging 208% over the quarter. The number of severely stressed households in the area rose from 749 to 2,306.
Brisbane and South East Queensland emerged as the fastest-growing mortgage default risk market in the country. Eight of the region's top 10 ranked postcodes posted increases in default risk during the quarter.
Postcode 4207, covering Yatala, Beenleigh, Bahrs Scrub and Bannockburn in the Gold Coast and Logan corridor, recorded the largest increase in mortgage default risk nationally, rising 73.3% over the quarter. The same postcode also recorded the region's sharpest increase in general mortgage stress, up 33.5%, with stressed households rising from approximately 3,598 to 4,802.
The Sunshine Coast postcode 4551 — encompassing Caloundra, Baringa, Kings Beach and Pelican Waters — recorded a comparable 33% increase in mortgage stress over the same period.
| Worst-hit postcodes by mortgage stress — Q1 2026 | |||
| Postcode | State | Suburbs | Key finding |
|---|---|---|---|
| 2066 | NSW | Lane Cove, Northwood, Riverview, Longueville, Linley Point | 208% quarterly increase in severe mortgage stress; stressed households rose from 749 to 2,306 |
| 4207 | QLD | Yatala, Beenleigh, Bahrs Scrub, Bannockburn | 73.3% increase in mortgage default risk; 33.5% increase in general mortgage stress; stressed households rose from 3,598 to 4,802 |
| 4551 | QLD | Caloundra, Baringa, Kings Beach, Pelican Waters | 33% increase in mortgage stress |
| 3030 | VIC | Point Cook, Werribee, Wyndham | 51.4% quarterly increase in mortgage stress |
| 3199 | VIC | Frankston, Karingal | 28% increase in mortgage stress |
| 6160 | WA | Fremantle | 175% increase in severe mortgage stress (2nd largest nationally) |
| 5158 | SA | Hallett Cove, O'Halloran Hill, Sheidow Park, Trott Park | 15.5% increase in general mortgage stress; stressed households rose from 2,489 to 2,875 |
| Source: OurTop10 | |||
Outer growth suburbs in Melbourne also continued to deteriorate. Postcode 3030, covering Point Cook, Werribee and Wyndham, recorded a 51.4% quarterly increase in mortgage stress, while postcode 3199 (Frankston and Karingal) posted a 28% increase over the same period.
In Perth, pressure increased across parts of Fremantle and the city's southern coastal corridor. Postcode 6160 in Fremantle recorded the second-largest increase in severe mortgage stress nationally, rising 175% over the quarter.
Adelaide remained comparatively stable, though pressure continued to build across the city's northern growth areas. The outer postcode 5158 — covering Hallett Cove, O'Halloran Hill, Sheidow Park and Trott Park — recorded the sharpest quarterly rise in general mortgage stress in the city, up 15.5%, with stressed households rising from approximately 2,489 to 2,875.
"For years, mortgage stress has largely been associated with outer suburban growth corridors and lower-income borrowers," said Mansour Soltani (pictured right), research advisor at OurTop10.
"What we're now seeing is pressure building in established, higher-income suburbs where households are carrying much larger debt levels.
"In many cases, these borrowers still earn strong incomes, but the combination of higher repayments, rising living costs and larger mortgages is putting serious pressure on monthly cash flow."
Martin North, principal at Digital Finance Analytics, said mortgage stress had moved well beyond isolated pockets of borrowers.
"A growing number of households are having to make difficult spending decisions simply to stay on top of repayments," he said. "Many borrowers built their financial position during a period of ultra-low interest rates. That environment has changed rapidly."
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