Martin North at DFA does monthly household surveys to assess the granularity of property data in Australia. What he finds is that one-third of households (about 1 million) are in mortgage stress. In Sydney, the problem is concentrated in the Western suburbs and inner city units.
Many Western and outer fringe households bought in at high prices and have experienced price falls of 30% or more. They are locked in because of little or no remaining equity and cannot refinance to get the benefit of lower rates. They have run down savings and run up credit cards in the hope that the situation would improve but there has been little movement in these areas and banks are starting to foreclose.
Inner city units have suffered similar price falls but also face the problem of poor construction standards which makes resale difficult.
Martin is skeptical of high auction clearance rates and recovery in prices, pointing out that this is largely restricted to the Eastern suburbs where households enjoy much lower mortgage exposure relative to property values.
Hat tip to Macrobusiness where I found the video.