Home loan arrears worsening
Arrears on home loans are on the rise, with the highest arrears for once in Western Australia and Queensland.
An analysis by Fitch Ratings of a much larger pool of home loan arrears data than used previously shows that as of September 2010 one per cent of borrowers were one month or more behind on their scheduled balance.
Fitch said that since delinquent borrowers tend to have above-average loan balances 1.54 per cent of the total mortgage balance is not performing.
The data covers around $155 billion in home loans and around 13 per cent of the national mortgage market. It is a larger sample than earlier reports as it also includes the arrears data on the "internal securitisations" undertaken by banks as one of the responses to the financial crisis.
Fitch said Western Australia and Queensland experienced "a remarkable deterioration in performance over the last year", with arrears of 30 days or more increasing to 1.97 per cent and 1.54 per cent respectively in September 2010 (and versus 1.37 per cent and 1.12 per cent in September 2009).
The ratings agency said that districts historically labelled as the "worst performing regions" have been impacted the most by the increasing interest rates.
It said South Western Sydney and the Central Coast north of Sydney, the Gold Coast in Queensland and the South West region in Western Australia are still experiencing delinquency rates far above the national average.
Fairfield-Liverpool continues to be the worst performing region in Australia, with one delinquent mortgage out of 60 and a 30+ day delinquency rate of 2.81 per cent.
Nelson Bay, north of Newcastle, remains the worst performing postcode overall, recording a delinquency ratio of 8.0 per cent by dollar amount and 3.3 per cent by number of loans in arrears.
Other problematic suburbs include Budgewoi in Newcastle; Mandurah, south of Perth; Casuarina in Perth; Richmond in north-west Sydney and Helensvale in Queensland.
This report does not cover arrears by lender or by lender type, though the data does include non-conforming loans.