If you’re looking to cash in on distressed properties, it may be worth your while keeping an eye on areas where residents are at high risk of credit default.
The Veda Australian Credit Scorecard
identified the top 10 worst regions for potential credit default and found that half of these areas are located in Sydney.
Top 10 worst regions for credit default
- Logan Beaudesert
- Sydney – Blacktown,
- Moreton Bay – North
- Sydney – City and Inner South
- Sydney – South West
- Sydney – Parramatta
- Melbourne – West
- Sydney – Outer South West
- Adelaide – North
Top 10 regions with the best credit score
- Sydney – Baulkham Hills & Hawkesbury
- Sydney – Sutherland
- Sydney – North Sydney and Hornsby
- Melbourne – Inner East
- Sydney – Northern Beaches
- Melbourne – Outer East
- Melbourne – Inner South
- Brisbane – West
- Adelaide – Central & Hills
- Hobart – South East
On a state by state basis, Queensland tops the highest proportion of residents likely to default at 16% followed by New South Wales, Victoria and Northern Territory tied at 13%.
Overall, this equates to 13% of Australians or 2.1 million people facing risk of credit default in the next 12 months.
Veda spokesperson Belinda Diprose explains that a default can come from something as simple as an unpaid bill, credit card or loan repayment.
“Historically, there have always been a number of individuals who have overextended themselves on credit and it can put them into debt stress later on,” she said.
This is especially the case with Sydney amid skyrocketing property prices and where people might have been tempted to take on a high mortgage.
“It is important that if you are struggling to meet your repayments you speak to your credit provider, there is likely something they can do,” said Diprose. “A default remains on your credit report for five years and can impact your ability to get credit or at the best rate.”
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