Regional Australians falling behind on home loans
Regional home owners are struggling with their home loan repayments more than their big-city counterparts.
A new report from credit ratings agency Standard & Poors has shown the proportion of regional homeowners behind on their mortgage payments has risen 18% in the year to July, compared to only 2% for capital city home owners, the Australian has reported. The report found that homeowners in Broken Hill, NSW, Armstrong Beach, Queensland, Currency Creek, SA and Butler, WA, had the highest rate of arrears in the country.
“Mortgage delinquencies in regional areas traditionally have outpaced metropolitan areas. This often has been the case because regional centres are more vulnerable to a downturn,” the report said, according to the Australian.
S&P analyst Erin Kitson told the Australian mining and manufacturing regions hit by job-losses over the past two years were seeing particularly high rates of arrears.
“If you look at the areas where the arrears have been growing, it is primarily regions where industry or major employers have exited the area and that has led to an increase in job losses. So you have a situation where people become unemployed but they still have to pay their mortgages,” Kitson said.
“The non-metropolitan regions of Australia tend to have economies which are less diverse compared to metropolitan areas, which means if you lose your job in Wide Bay there are going to be less opportunities than if you lost your job in Sydney or Melbourne.”