An increasing number of Australia’s worst performing suburbs for mortgage delinquency rates are located in tourist destinations, according to a new study.
Fitch Ratings’ latest Australian Mortgage Performance report noted that suburbs such as Airlie Beach, Noosa Heads and Surfers Paradise experienced some of the highest mortgage delinquency rates in the country over the six months to September 2011.
Nelson Bay, another popular tourist destination, was the worst performing postcode in the country by loan amount in arrears and the second worst performing postcode by number of borrowers in arrears.
Meanwhile, overall mortgage delinquency rates improved across Australia on account of stable interest rates, with delinquencies decreasing from 1.77% in March 2011 to 1.42% in September.
James Zanesi, a director in Fitch Rating’s Structure Finance team, said that socio-economic factors had a strong bearing on which regions were most sensitive to mortgage rates. "Those regions [which] were affected most in March 2011 by Christmas spending and increased interest rates have benefited most from stable cash rates," he said.
Western Australia saw dramatically improved mortgage performance with one in four obligors curing their delinquency status between March and September. This was brought on by a rebound in the tourism and mining industries and a general improvement in employment figures.
Queensland was the worst performing state by mortgage performance, recording a delinquency rate of 1.7%, albeit down from 2% in March. The Fitch Ratings report speculated that this was largely a result of increased living costs and expenditures brought on by Christmas spending and natural disasters.
Mortgage arrears continue fall
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