Mining states hit hardest by mortgage delinquencies
A rise in WA in the number of people behind on their mortgages has driven a nationwide increase in delinquencies.
A report by ratings agency Standard & Poor’s has found the percentage of WA home loans in arrears has risen from 1.5% in December 2015 to 2.1% in December 2016, the Australian Financial Review has reported.
“Higher unemployment, lower wage growth and falling property prices are creating mortgage stress in WA, as evidenced by the state’s higher arrears,” S&P said.
According to the AFR, resources-dependent states suffered some of the worst performance. Western Australia and Queensland accounted for eight of the 10 postcodes with the highest proportion of arrears in Australia. Moreover, S&P said recent commodity price rises were unlikely to bolster investment or employment in the mining sector.
“This means higher arrears in WA are likely to press for some time, as the downturn in mining investment continues to take effect,” the ratings agency said.
The national proportion of home loans in arrears edged up slightly as a result of the rise in WA delinquencies, climbing to 1.15% in December from 1.14% in September. New South Wales and Victoria, despite their pricey property markets, saw the lowest occurrence of arrears, at 0.86% and 1.08%, respectively.
- Now’s a good time to consider an investment property in regional Australia
- Australia’s top FOMO suburbs: the once-cheap suburbs now worth a ton
- Renters could face tough market in future
- Virgin Money breaks with rivals by cutting interest-only mortgage rates
- How first home buyers are getting into the market (and how you can too)