An estimated 39,600 households in the Hunter are now under mortgage stress with regular costs running past monthly income, new data has revealed.
The figures, pulled from the OurTop10 Mortgage Stress and Default Loan Reports, were powered by a Digital Finance Analytics' rolling survey of 52,000 households.
The data covered all ten Hunter councils, from Newcastle and Lake Macquarie to the Upper Hunter with Lake Macquarie and Cessnock postcodes dominating both rankings.
The figures show the fastest-rising mortgage stress NSW postcode is not in Sydney.
Rutherford emerged as one of the fastest-rising mortgage stress postcodes in the country, with the number of struggling households in the Maitland-Cessnock corridor suburb more than doubling in a year.
Figures show 6783 households in the 2320 postcode were in mortgage stress in the June quarter, up from 4811 three months earlier and 3295 a year ago representing a 41 per cent quarterly jump and a 106 per cent annual rise.
Across the Hunter's ten hardest-hit postcodes, an estimated 39,600 households are now in mortgage stress, up 7.2 per cent, roughly 2650 households in just three months.
Digital Finance Analytics principal Martin North said the Hunter reflected a broader pattern playing out across the country, as prices outpaced local wages.
"The Hunter Region is a good microcosm of the Australian property story," Mr North said.
"Across the board we see a continued rise in cash-flow pressures and a rising risk of default, thanks to property prices rising faster than incomes, higher costs of living - including energy bills and council rates - and larger mortgages, due to rising prices and interest rates.
"More recently, prices have begun to slide, as stock on market is rising, and not selling.
"Ahead, we expect more pressure, from further RBA rate hikes later in the year, ongoing inflation, and lower wages growth.
Mr North said wages across the Hunter are on average lower than closer to Sydney, making property more attractive for people seeking a tree/sea change from Sydney, compared to locals who are being priced out.
"There is higher dispersion of stress among locals, though recent arrivals are now also caught in the higher mortgage trap," he said.
Six of the ten ranked postcodes recorded increases over the quarter.
Raymond Terrace (up 33 per cent), Metford ( up 28 per cent) and Glenridding, in the Singleton council area, ( up 20 per cent) followed Rutherford as the region's steepest risers.
The pain was not shared evenly.
Wallsend, Edgeworth and Woodberry all recorded improvements of between 9 and 13 per cent over the same period, underscoring how concentrated the pressure has become in the Cessnock and Mid-Coast areas.
A separate measure of default risk rose in every one of the Hunter's ranked postcodes.
At-risk households across the region increased 14 per cent over the quarter to about 2100.
Wyong holds the largest at-risk count in the Hunter at 452 households, while Belmont recorded the fastest annual rise, at 67 per cent.
Rutherford, despite topping the stress rankings, also sits fourth in the region for default risk after a 28 per cent quarterly increase.
OurTop10 founder Mansour Soltani said the figures showed the mortgage itself, not household overspending, was driving the pressure.
"The Hunter has been sold as the affordable alternative to Sydney, and these numbers show what happens when prices run ahead of local wages," Mr Soltani said.
"The people in these postcodes aren't overspending, the mortgage itself is the pressure."
Mortgage stress is measured on a cash-flow basis as money in versus money out rather than the traditional rule of thumb that flags stress once housing costs exceed 30 per cent of income.
Analysts say defaults typically follow a sustained period of stress, with a lag of three to five years, and more than half of households that do default sell within a couple of years.
Nationally, the report found 421,700 households across 80 ranked postcodes were in mortgage stress, up 14 per cent in the June quarter alone, with Perth recording the largest net increase of any market.
