Residential mortgage delinquencies in Australia are at their lowest level since 2006 as home owners enjoy record low interest rates and growing house prices.
Mortgage delinquency rates are improving in Sydney where house prices are rising rapidly. However, some mining regions are doing it tougher as lower commodity prices drag down Australia’s resources sector, according to analysis by Moody’s Investors Service.
Overall, 1.19% of residential mortgages were more than 30 days in arrears at the end of November 2014, an improvement over the 1.24% of the year before.
Mortgage delinquencies are now at their lowest level since 1.03% in 2006.
“We expect stable mortgage performance for the rest of 2015, with delinquencies remaining low,” analyst Alena Chen said.
However, regions exposed to the mining industry are seeing more people getting behind on their home loan payments.
In the second half of 2014, the price of key commodities declined with iron ore down 50%, coal down 10%-20% and oil falling 50%.
And regions exposed to the mining industry recorded the biggest delinquencies. Mackay and Queensland Outback have reversed their positive trends of only a few years ago and now show some of the highest delinquencies.
Here are the worst performing areas:
“This decline has hit the mining, oil and gas sectors hardest,” Chen said. “However, weakness in these sectors also impacts industries such as construction and services, which derive their business from the mining, oil and gas sectors.”
Eight of the 10 worst performing regions had unemployment rates higher than the national average of 6.1%.
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