Mortgage stress across Australia slid for six months to 30 September, as borrowers adapted to a period of stable interest rates.
For the first time since November 2010, the Reserve Bank of Australia reduced interest rates in November and December.
Within the period, mortgage delinquencies dropped significantly across all six states. According to global ratings agency FitchRatings, Western Australia recorded strong improvement, underpinned by the rebound in the mining sector.
The percentage of delinquencies or loan repayments overdue by more than 30 days dropped from 1.77 percent in March to 1.42 percent on 30 September 2011.
FitchRatings said this means that one in 400 borrowers reversed their delinquent status over the six-month period.
“As mortgage rates have decreased and the Australian economy and unemployment remain solid, the increased cost of living remains the main variable generally affecting household affordability,” said FitchRatings Director James Zanesi.
“Those regions which have shown strong sensitivity to mortgage rates due to socio-economic factors and which were affected most in March 2011 by Christmas spending and increased interest rates have benefited most from stable cash rates.”
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