Western Sydney home owners 'battening down the hatches'

With half of his regular household income swallowed by mortgage repayments, new Western Sydney home owner Chris Shaw says there is little left over for anything else."It is hurting quite a bit. It's a bit tough to make do at the moment," he said."We really want to start a family, and I'm not sure what will happen to our finances if we do."Really the only reason I think we could [start a family] is because my parents have said we can fall back on them if we need to."Mr Shaw, who is also a Labor Party member, bought his home in Rooty Hill in April, with his parents helping with the deposit.Mr Shaw recently bought his first home in Rooty Hill with help from his parents. (ABC News: Charlie McLean)He said he was concerned new home owners would be disproportionately affected by rising interest rates, which hit a 15-year high this week."My parents, for example, they're fairly wealthy home owners, and they deserve a comfortable retirement because they've worked really hard to get to where they are, but interest rates don't affect them," he said."Increasing interest rates actually helps their financial situation because they don't have a mortgage, but they have cash in savings that's paying them interest."We need some more creative levers that can help to spread the load a bit more evenly because interest rates, as people say, is quite blunt and it hurts people like me and my wife far more than most people in the economy."The Reserve Bank of Australia (RBA) board said economic growth and inflation were higher in Australia than had been expected, and interest rates needed to rise to reduce capacity pressures and bring inflation back to target.Falling house prices have added to some woes, with a 1.4 per cent drop in home values recorded in Sydney in September.Adam Leto from advocacy group Western Sydney Leadership Dialogue said new home owners were among the hardest hit by the downward trend."I think a lot of new home owners will be battening down the hatches, hoping they can ride this thing out over the next year or so," he said."There are a large proportion of mortgage holders in Western Sydney who were already under mortgage stress."Western Sydney families know how to stretch a dollar but it's getting harder and harder."Mr Leto says homeowners in Western Sydney are under pressure. (ABC News: Fiona Willan)Others were less concerned about the trend, with new Parramatta home owner Jonathon Noujaim, 26, saying he had no immediate plans to sell."I'm happy that [property prices] are coming down because it means more young people like me can also get their foot in the market," he said."As an owner-occupier, I'm not really concerned as much with the house prices … I don't really have any intention of moving anytime soon."Mr Noujaim says he's hopeful more young people will enter the housing market. (ABC News: Charlie McLean)Mr Noujaim said about 30 per cent of his income went on mortgage repayments, and he had taken care to be more "deliberate" in his spending as interest rates had increased.Seek support early, expert saysAssociate professor of finance at the University of Sydney, Andrew Grant, said there were options available to people who were struggling to afford their home loan repayments."We are seeing a lot of people give up a lot of near-essentials to be able to continue to pay their mortgage and we are likely to see that, particularly if we have one or two more rate rises, things are going to get quite difficult for a lot people out there," he said."You can talk to the bank and hopefully do that early so that you can at least be walked through some of the options you do face if you're in hardship."If house prices are going down and you need to sell your house, it's better to do it on your own terms than on someone else's terms."