Victorians facing financial challenges due to mortgage burdens are exploring unconventional solutions to make ends meet. Many are turning to holiday rentals, Airbnb, and taking on additional jobs to manage their mortgage repayments as property values decline and interest rates remain high.
The Reserve Bank’s decision to hold interest rates at 4.35% has left homeowners struggling to refinance their loans. As a result, some Victorians are resorting to renting out their properties on platforms like Airbnb to generate extra income.
In 2024, Victoria saw a surge in calls to the National Debt Helpline, with more than 35,000 residents seeking financial counseling. The primary reason for these calls was the challenge of meeting home loan repayments.
Airbnb Australia reported that a significant number of hosts were using the platform to combat the rising cost of living and to avoid losing their homes. The demand for short-term rentals in areas like Camberwell and St Kilda remains high, especially during major events like the Australian Open and AFL matches.
Experts have noted a rise in individuals, particularly women over 55, offering spare rooms for rent to supplement their income and support their mortgages. Platforms like Flatmates.com.au have observed an increase in live-in landlords renting out rooms to cope with financial pressures.
Younger homeowners who purchased properties between 2018 and 2021 are particularly impacted by the current economic climate. Many are working extra jobs to manage the increased financial strain, as they find themselves stuck in what is termed a “mortgage prison.”
While some homeowners are hopeful for a rate cut to alleviate their financial burden, experts warn that a significant reduction in interest rates may not be imminent. Individuals are exploring various income-generating opportunities, such as freelancing and taking on additional work, to cope with the ongoing challenges.
Loan Market Connect director Jacob Decru highlighted that some homeowners are valuing their properties differently to explore refinancing options. However, not all are successful in refinancing due to insufficient equity, leading them to adopt more stringent budgeting measures.
As the property market landscape continues to evolve, Victorians are adapting to economic uncertainties by embracing alternative income streams to navigate the financial pressures associated with mortgage repayments and declining property values.
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