Victoria has one of the highest mortgage stress rates in Australia at 29.1%, driven by a combination of high property prices in Melbourne's middle and outer suburbs, and relatively softer income growth compared to NSW. The state's economy has been hit by construction sector slowdowns and public sector job reductions. Regional Victoria — particularly Geelong and the Surf Coast — saw rapid price growth during the pandemic that is now colliding with higher rates.
At the average VIC mortgage of $628,000 on a 6.5% variable rate over 30 years, monthly repayments are approximately $3,969. Against the state median household income of $89,000, that represents roughly 53.5% of gross income — above the 30% stress threshold.
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Mortgage stress patterns within Victoria vary by area. The major population centres are: Melbourne, Geelong, Ballarat, Bendigo. Outer suburban and regional areas often experience higher stress rates due to lower incomes and fewer employment options, despite smaller mortgage sizes.
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