Distant urban centres focus of home loan stress

The mix of postcodes with the greatest level of home loan arrears is taking on a different hue, with local economic stress - not floods or other disasters - possibly explaining the strife in urban growth corridors that are increasingly distant from the cities to which they notionally relate.

Detailed data published today by Fitch Ratings highlights the incidence of rising arrears in Logan City and the Gold Coast to the south of Brisbane. The coastal urban sprawl to the south of Perth; the Melton growth area between Melbourne and Ballarat; and the more familiar centres of stress on the New South Wales Central Coast (to the north of Sydney) and the sprawl that is south-western Sydney all feature.

By value, Fitch listed the worst performing regions as Fairfield-Liverpool (where 2.99 per cent of loans are 30 days or more in arrears); south-west WA; Gold Coast West; outer south-western Sydney and Logan City (including Baudesert).

By number of loans in arrears, Fitch rated Logan City as the worst affected region. The Central Coast and Blacktown (in Sydney) also ranked in the top five.

On a nationwide basis, Fitch said that 1.23 per cent of borrowers by number and 1.76 per cent by value had missed one or more mortgage payments at March 2011.

Fitch said that over the six months to March, arrears increased in all Australian states, with the most marked declines in payments being in Queensland.

Fitch rated Nelson Bay, north of Newcastle, as the worst performing postcode, with 5.6 per cent of loans in arrears, measured by value.

By number of arrears, Fitch identified the Logan City the postcodes 4132 (Crestmead/Marsden) and 4114 (Kingston), where 3.3 per cent of borrowers are in arrears, as being the worst affected.