The number of home loans in arrears in Australia increased in the first quarter of 2016, with Western Australia and Tasmania topping the list, with delinquencies increasing by more than 7% from the same period last year.
The weighted-average Standard & Poor’s Performance Index, which measures home loans in arrears for more than 30 days, hit 1.13% in the three months to March, up from 0.96% in the fourth quarter of 2015.
However, this is well below the historical peak of 1.69% in 2012.
Arrears increased in every state and territory, with Western Australia recording the highest at 1.77%, followed by Tasmania at 1.51% and Queensland at 1.42%.
Queensland and Tasmania have seen rises in unemployment and Western Australia is dealing with the ongoing effects of a slowdown in mining investment.
“While the unemployment rate appears to be improving in WA, the effects of lower wage growth … are likely to be creating a degree of mortgage stress as the economy transitions away from jobs in the higher-paying mining sector,” Standard & Poor’s says
“We expect this trend to continue as borrowers adjust financially to lower-paying jobs outside of the mining sector, particularly for those loans that were underwritten at the peak of the mining boom.”
New South Wales and the ACT have the lowest levels of mortgage stress, with both below 1%.
While Western Australia is the state with the highest delinquency rate, the worst suburbs for getting behind with home loan payments are spread across Australia, as this chart from Standard & Poor’s shows:
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