How To Stress-Test Loans Against Local Vacancy, Tourism And Building Risk

You should stress-test your loans by combining three shocks: (1) interest rates 2–3% higher, (2) lower rent or business income from local vacancy/tourism hits, and (3) longer vacancy from new supply. If you can still cover repayments and essentials from income plus a 6–12 month buffer, the deal is usually manageable; if not, you need to change the structure, buffer or decision.

Roy Morgan’s 2026 data shows over 30% of Australian mortgage holders are now ‘At Risk’ of stress, largely because they didn’t run these scenarios before borrowing. Use this week to check your position before the next rate move or local shock.

Simple stress tests can reveal how local vacancy and tourism shifts affect your loans.

Step 1: Map your exposure to local vacancy and tourism

First, be clear how your loan relies on local conditions.

Ask yourself:

• How much of my income is tied to this postcode or industry?
• Is the property in a tourism-heavy area or a construction hotspot?
• Do I need high rent or full bookings for the numbers to work?

Common high‑risk situations:

• Short‑stay or Airbnb‑style income in areas with tightening rules (see /insights/land-tax-investment-short-stay-rules-finance-impacts-states).
• High‑density suburbs where multiple towers are completing at once.
• Regional or coastal towns where local jobs and visitor numbers swing quickly.

If you’re refinancing an investment, remember lenders already price these risks differently from owner‑occupier loans, so your buffers and structure need to be tighter than for your home loan (see /insights/refinancing-investment-property-vs-home-whats-different).