Fewer Australians are defaulting on their mortgage obligations, despite the bleak global economic outlook.
The number of homeowners that failed to pay their loan instalments on time dropped across the country for September, down by nearly a quarter since March, according to the latest Fitch Ratings report.
Victoria is home to Australia’s most prudent borrowers, while homeowners from Melbourne’s middle-northern region, such as Research and Eltham, are the most dependable debtors in general, with only 0.54 percent in arrears. However, debtors in Brighton East are considered among the worst in the state.
Fitch noted that the improvement in borrower’s payments was primarily attributed to the Reserve Bank keeping interest rates stable, while the two latest cuts in rates are expected to help further.
Across Australia, around 1.42 percent of borrowers failed to pay their mortgage payment within 30 days in September against the March high of 1.77 percent.
“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,” said James Zanesi, Finance Director at Fitch.
Even in areas where mortgage delinquency rates are highest, such as Liverpool and Fairfield in Sydney, only a few have fallen into arrears.
“Sydney’s south-western suburbs and the central coast, the Gold Coast in Queensland and the south-west region of Western Australia continue to experience above average arrears,” Zanesi said.
Queensland is still the worst performing state due to a series of natural disasters.
Fitch also noted that “an increasing number of the 20 worst performing suburbs in Australia are located in ‘tourism destinations’ such as Airlie Beach, Noosa Heads, Surfers Paradise and Nelson Bay.”
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