These are the 20 worst suburbs for defaulting on home loans

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Getting behind in home loans payments is something Australians tend to avoid but there are always pockets of people who slip for various reasons.

In Sydney, home loan delinquencies are low because of strong rises in house prices, according to Fitch Ratings in an analysis of mortgage default data.

Metropolitan regions haven’t experienced the usual deterioration in mortgage delinquency rates caused by overspending at Christmas, but there are still some areas in Australia where mortgage defaults have been rising.

Budgewoi, on the New South Wales Central Coast, has topped the list for the second time as Australia’s worst performing postcode for missing housing loan payments.

The area has a 30-plus days delinquency rate of 3.2%. Budgewoi has appeared 11 out of 14 times in Fitch’s previous mortgage delinquency reports.

Tasmania replaced Queensland as the worst performing state with a delinquency rate of 1.33%. This reflects Tasmania’s high unemployment rate and low house value appreciation over the past three years.

Here are the worst performing postcodes by value:

  • On average, the delinquency rate across Australia increased 9bp to 0.99% at end-March 2015, up from 0.90% in September 2014.
  • The strong house-price appreciation and lower interest rates slightly offset the negative impact of seasonal Christmas overspending.
  • For the first time, Mackay in Queensland became the worst-performing region in Australia by dollar value, replacing Hume City in Victoria.
  • The best performing regions in by value are Lower Northern Sydney, Inner Melbourne, Inner Brisbane and Central Metropolitan Perth.
  • At a regional level, country Queensland and non-metropolitan Western Australia are performing poorly.

Fitch says it is likely that the slowdown of the Australian mining industry is among the reasons for the trend.

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