SYDNEY, April 24 (Xinhua) -- Hundreds of thousands of Victorians are struggling to keep up with their mortgage repayments, a report has found.
The report by Digital Finance Analytics (DFA), published by News Limited on Monday, found that 300,000 Victorians could barely afford their monthly mortgage payments.
DFA said that if interest rates were to rise by 2 percent, the number of people struggling would double to 600,000.
Even an interest rate rise of 0.5 percent would add an extra 50,000 homeowners to the list of people who are struggling.
The report comes as both Melbourne and Sydney are embroiled in a housing crisis with the median house price in Melbourne having more than doubled in the past 10 years.
Australia's biggest banks took interest rates into their own hands in March, making out of cycle changes to the rates they offered that were not in line by recommendations of the Reserve Bank of Australia (RBA).
Martin North, the principal of DFA, said he was certain that interest rates would continue to climb over the next 18 months.
"We have a lot of households today who are on the edge," North told News Limited on Monday.
"They're managing to make their repayments, but they're spending less at the shops, cutting back on other things, putting more on credit cards and hunkering down."
He said that slow wage growth combined with household debt and the increase in the cost of living could throw Australia into financial crisis.
"We almost need a housing correction because I don't think regulators can solve the equation," North said. "There's a crash that we have to have."
