Metro outperforms regional for mortgage delinquencies

With a delinquency rate of 3.2 per cent for the 30-plus day category, Budgewoi has appeared 11 out of 14 times in Fitch’s previous mortgage delinquency reports.

Fitch Ratings said most of the 20 worst-performing postcodes were metropolitan regions with the only exception being Laidley and Mount Isa in Queensland.

“However, metropolitan regions overall performed better than non-metropolitan areas, especially in Western Australia, Queensland and Northern Territory where the slowdown and job cuts in the mining industry have been detrimental to mortgage performance,” it said.

“Christmas spending and the general cost of living affected the mortgage performance of regions in states that showed strong sensitivity to mortgage rates, such as the north-west Melbourne and south-west Brisbane, due to socio-economic factors like high unemployment.”

For the first time, Mackay (Queensland) became the worst-performing region by dollar value over the six months to 31 March, following a 59-basis-point decrease in the 30-plus day category.

The best performing regions in their respective states were lower Northern Sydney (NSW), inner Melbourne (Victoria), inner Brisbane (Qld), and central metropolitan Perth (WA).

The report showed the average delinquency rate across all of Australia increased nine basis points to 0.99 per cent over the six months to 31 March.

“The strong house price appreciation and lower interest rates slightly offset the negative impact of seasonal Christmas overspending, as arrears are 36 basis points lower than 12 months ago,” Fitch Ratings said.

[Related: Stats reveal mixed results for loan arrears]