Samantha Healy, Property Journalist
Almost 25,000 households are staring down a mortgage cliff as fresh figures reveal the pain is spreading fast, with one postcode alone posting a brutal 25 per cent spike in just three months.
New figures from the latest OurTop10 Default Loan Report, compiled by Digital Finance Analytics, show 24,546 households across 70 postcodes are at risk of defaulting on their home loan over the next 12 months.
That’s the highest reading in the series and a 24 per cent leap from a year ago.
And while the quarterly rise slowed to 3 per cent, experts say there’s no real relief in sight.
“A slower quarter is not a better quarter,” OurTop10 head of research Mansour Soltani said.
“Twenty-four thousand households at risk of default is a record for this series, and the pressure is now spreading from the growth corridors into Adelaide and regional Queensland.”
OurTop10 head of research Mansour Soltani
In Queensland, the statewide figure looked almost flat at first glance, rising just 0.6 per cent to 5139 households across the state’s 10 ranked postcodes.
But underneath that result, the pressure is building hard in regional areas.
Manunda in Cairns was the standout alarm bell, with the number of households at risk of mortgage default jumping 25 per cent in a single quarter, from 359 to 448.
That made it the state’s biggest quarterly rise and the sharpest jump in mortgage stress anywhere in the country for the quarter.
Aerial of Cairns, where the suburb of Manunda saw the number of households at risk of mortgage default jumping 25 per cent in a single quarter, from 359 to 448.
Craignish on the Fraser Coast also surged 17 per cent to 499 households, while Yatala on the Gold Coast climbed 11 per cent to 560.
Toowoomba still had Queensland’s biggest total, with 616 households at risk, despite easing 5 per cent over the quarter.
Mr Soltani said the pattern was deeply familiar.
“What we’re seeing in Cairns and the Fraser Coast is the same sequence that played out in Melbourne and Perth’s outer suburbs,” he said.
“Households fall into cash-flow stress first, they run down their savings, and a few years later the defaults follow.”
But the pain is not confined to the top 10 most at-risk suburbs, with this house at Mansfield in Brisbane listed as a mortgagee sale by public auction
The warning comes as borrowers continue to face higher interest rates and rising living costs, with analysts saying many families have already exhausted the buffers that got them through the first phase of the squeeze.
“These figures don’t yet capture September’s rate hike, let alone a possible fifth this week, and the full impact of the earlier hikes is still working its way through household budgets,” Mr Soltani said.
“What we’re seeing now is likely just a snippet of what will become a bigger national crisis over the next 12 months.”
This Sunshine Coast acreage is alost listed as a mortgagee sale
Victoria remains the mortgage default capital of the country, with 6026 households at risk across its 10 ranked postcodes.
Cranbourne in Melbourne’s south-east stayed the nation’s biggest hotspot, rising 8 per cent to 1364 households at risk.
South Australia recorded the fastest quarterly rise of any state or territory, with at-risk households across its ranked postcodes jumping 13.6 per cent to 1874.
Encounter Bay posted the biggest quarterly blowout in the nation, surging 78 per cent from 93 to 166 households.
The bank has also moved on this Davoren Park, South Australia, house
In NSW, overall risk eased 1.2 per cent to 3782 households, but Blacktown bucked the trend with a 27 per cent quarterly jump and a massive 76 per cent annual spike.
Mr Soltani said many households were now running on fumes.
“Many households have already burned through their savings buffers. The real test now is how much longer they can hold on in this economic climate,” he said.
“We’re already seeing early warning signs, with banks reporting a rise in requests for hardship arrangements this year.”
Two Box Hill display houses by Beechwood Homes, now in liquidation, are also being sold by Colliers, on behalf of the Agent for the Mortgagee in Possession.
The figures are modelled estimates of households at risk of default in the next 12 months, rather than loans already in arrears.
And the pain is only expected to continue to pile on, with Reserve Bank of Australia (RBA) tipped to increase interest rates tomorrow – Melbourne Cup Day.
If that nightmare plays out, and the official cash rate is increased by another 25 basis points to 4.84 per cent, it will mark Australia’s highest cash rate since the 2008 Global Financial Crisis.
Forget the race that stops the nation. It could be the rate that crushes a nation.
Melbourne Cup Day 2025, when the cash rate was 3.6 per cent. Picture: David Caird
Canstar’s data insights director Sally Tindall said that “rate hikes are always a bitter pill for borrowers to swallow”.
“Now these households look set to be pushed to up the prescription for a fifth time this year,” she said.
“A 0.25 increase will add roughly $92 a month to an average $600,000 debt with 25 years remaining, pushing the total increase to repayments this year to $456.
“That’s close to half a grand extra a typical borrower will have to pay compared to just 12 months before.
“That’s going to translate into a very different Christmas for many households than the one they had even just last year.”
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And any further increases come as home prices continue to go backwards.
Australia’s national median home price declined by 0.3 per cent in October, with prices now 4.3 per cent below the peak reached in March, according to the latest realestate.com.au Home Price Report.
Sydney prices are now 6.7 per cent below their November peak, making it the weakest city in the nation when it comes to property price performance.
Melbourne was close behind with a 6.1 per cent fall since October last year.
Brisbane and Perth’s downturns have almost reached the same magnitude as Sydney and Melbourne’s, with Brisbane values now 5.8 per cent below the peak reached in March, and Perth down 5.7 per cent since then.
“Sydney and Melbourne entered the correction earlier, but some of the sharpest recent declines are now occurring in Brisbane, Adelaide and Perth, where years of exceptional growth have substantially eroded affordability,” REA Group senior economist Eleanor Creagh said.
“The sharp reversal in previously strong markets highlights how higher borrowing costs and stretched affordability are increasingly constraining purchasing power.”
REA Group senior economist Eleanor Creagh
And for those who bought at the top of the market using the government’s 5 per cent deposit scheme, look away now.
Chances are you are now paying off a mortgage worth more than your home.
The rapid downturn in home prices is being billed as the fastest crash in about 40 years.
OurTop10 Default Loan Report : TOP POSTCODES BY DEFAULT RISK
NEW SOUTH WALES: Gosford, Wyong, Campbelltown, Bateau Bay, Liverpool, Beaumont Hills, Blacktown, Turvey Park, Hornsby, Goonellabah.
WHAT THE REPORT SAID: Sydney’s run as the fastest-growing default market has stopped. After rising 24.8% in Q2 2026, at-risk households across the region’s 10 ranked postcodes slipped -1.2% this quarter to 3,782. Only 5 of the 10 rose, and three of its bigger postcodes went backwards: Campbelltown (2560) -8%, Hornsby (2077) -8% and Wyong (2259) -15%. The year-on-year picture is less comfortable. The region is still up +25.3% on a year ago, and the western suburbs are now the pressure point: Blacktown (2148) rose +27% in the quarter and +76% over the year, from 196 to 345 at-risk households, and Liverpool (2170) is up +74% for the year. Gosford (2250) holds the state’s largest count at 592, essentially flat on the quarter. Hornsby, flagged last quarter as the firstaffluent postcode to appear in the default rankings, eased -8% but is still +42% higher than a year ago.
QUEENSLAND: Toowoomba, Bundabergm Pacific Pines, Yatala, Craignish, Coomera, Mount Pleasant, Bellbird Park, Manunda, Barney Point.
WHAT THE REPORT SAID: Queensland is flat. At-risk households across the state’s 10 ranked postcodes rose just +0.6% this quarter to 5,139, the smallest rise of any market, with only 4 of the 10 rising. The annual figure, +18.9%, shows the pressure built earlier in the year has not unwound. Regional Queensland is where the movement is. Manunda in Cairns (4870), the postcode with the country’s sharpest rise in mortgage stress this quarter, also recorded the state’s largest increase in default risk, up +25% to 448. Craignish on the Fraser Coast (4655) rose +17% and Yatala in Logan (4207) +11%. Toowoomba (4350) still carries the state’s biggest count at 616, down -5% on the quarter. Coomera on the Gold Coast (4209) recorded the largest fall, -16%, and Bundaberg (4670), up +7% for the quarter, is essentially unchanged on a year ago (+1%).
VICTORIA: Cranbourne, Tarneit, Roxburgh Park, Derrimut, Clydem Pakenham, Highton, Doreen, Narre Warren, Deer Park.
WHAT THE REPORT SAID: Melbourne and surrounding regions remain the largest default-risk market in the country, with 6,026 at-risk households across the 10 ranked postcodes, up +2.6% for the quarter and +25.4% for the year. 7 of the 10 rose. Cranbourne (3977) is still the single largest default-risk hotspot in Australia at 1,364 at-risk households, up +8% in three
months and +36% on a year ago. The sharpest quarterly rises were Narre Warren (3805) at +23% and Deer Park (3023) at +19%, both in the south-east and west growth corridors.
Two of last quarter’s big risers have cooled. Tarneit (3029) fell -13% to 869, and Ferntree Gully (3156), which jumped 166% in Q2 2026, has dropped out of the top 10 altogether. Movements like these are consistent with DFA’s view that defaults sometimes self-cure, but Melbourne’s list is still +25.4% higher than a year ago.
SOUTH AUSTRALIA: Happy Valley, Morphett Vale, Paralowie, Hallet Cove, Yattalunga, Clearview, Encounter Bay, Glenelg North, Pooraka, South Plympton.
WHAT THE REPORT SAID: Adelaide is this quarter’s fastest-growing default market. At-risk households across the city’s 10 ranked postcodes rose +13.6% in three months to 1874, and +31.0% over the year, the strongest annual rate of any market. 7 of the 10 rose.
Encounter Bay (5211) on the Fleurieu Peninsula recorded the sharpest quarterly rise anywhere in Australia, up +78% from 93 to 166. Glenelg North (5045) was next at +52%, then South Plympton (5038) at +38% and Pooraka (5095) at +31%. Adelaide’s base is small, so individual postcodes can swing, but seven of 10 moving the same way in one quarter is not noise. Happy Valley (5159) holds the city’s largest count at 249. Yattalunga (5114) is the one ranked postcode lower than a year ago.
WESTERN AUSTRALIA: Mandurah, Success, Armadale, Wanneroo, Huntingdale, Canning Vale, Ellenbrook, Heathridge, Merriwam Baldivis.
WHAT THE REPORT SAID: Western Australia has the biggest volume jump in the country, though it comes with a caveat. Mandurah (6210) tops the rankings at 966 at-risk households, the largest count in WA and the second-largest nationally, but DFA’s extract carries no June
reading for the postcode, so its quarterly change cannot be calculated. On the nine postcodes with a prior reading, at-risk households rose +7.3% for the quarter. 7 of the 10 ranked postcodes rose. Canning Vale (6155) recorded the west’s sharpest quarterly rise at +31%, and Armadale (6112) rose +15% to 805. By volume, Success (6164) at 852, Armadale at 805 and Wanneroo (6065) at 638 follow Mandurah. Every one of WA’s 10 ranked postcodes is higher than a year ago, with the state up +26.4% on 12 months earlier.
ACT: Amaroo, Latham, Ngunnawal, Weston, Ainslie, Kaleen, Calwell, Reid, Banks, Narrabundah.
WHAT THE REPORT SAID: Canberra’s default-risk base is small, 1257 at-risk households across its 10 ranked postcodes, and its growth has slowed to +3.1% this quarter. It is still +21.4% higher than a year ago, with 6 of 10 postcodes rising over the quarter. Weston (2611) recorded the territory’s sharpest quarterly rise at +29%, from 111 to 143. Amaroo (2914) in Gungahlin carries the ACT’s largest count at 250, up +11% for the quarter and +37% for the year. Last quarter’s fast risers have eased: Kaleen (2617) and Banks (2906) both fell over the quarter. Canberra’s story remains one of speed off a small base rather than scale.
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