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Mortgage Arrears Stable

Friday, April 27, 2018 - Posted by Michael McCulloch

Moody's Investor Services are reporting that home loan arrears tracked by credit rating agencies declined during the June 2017 to September 2017 quarter with half a dozen suburbs across Australia being 30 days or less behind on repayments.

The sample size, which covered $125 billion of mortgages across 2,400 postcodes, showed that Australians on top of their mortgage reside in Carlingford, Crows Nest and Mosman in New South Wales, Bentleigh and Glen Iris in Victoria and Ormiston in Queensland. Darlinghurst, NSW also reported an arrears rate of below 0.1%

Meanwhile Gladstone in Queensland is reporting that nations highest delinquency rate of 4.95% meaning that 1 in every 20 households with a mortgage is in danger of defaulting. Gladstone saw a large population increase owing to the construction of several LNG export terminals however as these projects were finalised unemployment rose substantially. Gladstone wasn't the only town impacted with Alpurrurulam, in the Northern Territory, also being impacted by the mining slowdown with a 30 plus day delinquency rate of 4.95% The sample indicated that properties in Queensland and Western Australia were the hardest hit owing directly to the resource investment downturn and the subsequent fall in housing prices.

Moody's have reported that they believe there will be an increase in delinquency this year (1.45% national average) with a pattern emerging that as property prices fall there is a close correlation with higher mortgage arrears. A spokeperson said, "Softening housing market conditions, particularly in the key states of NSW and Victoria, will drive delinquencies moderately higher. Less favourable income dynamics and ongoing volatility in the resources sector will also weigh on mortgage performance."

Source: ABC News - April 2018

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