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Fitch Ratings- Sydney/Singapore- 29 May 2008: Fitch Ratings is to release its highly anticipated “Australian Mortgage Delinquency by Postcode – 31 March 2008” report tomorrow. The report reviews the performance of Australian residential mortgages at a national, state, regional and postcode level and shows that while mortgage stress (as defined as borrowers who have missed one or more payments) remains low on a national basis, it is concentrated in certain regions and postcodes. The report is based on a study that covers more than 947,000 Australian residential mortgages outstanding at 31 March 2008. “On a national basis, Australian mortgages continue to perform well with just 1.88% of mortgages included in this study being more than one month past due, and just 0.73% of mortgages being more than three months past due. However, the national figure masks the fact that certain areas of the country are more than three times worse than the national figures suggest,” said Ben McCarthy, Managing Director of Structured Finance in Sydney and author of the report. The worst performing postcode in the nation according to the study is 2164 – Wetherill Park, a suburb of Sydney in the Fairfield region in New South Wales (NSW). In Wetherill Park, 6.7% of mortgages in the agency’s sample by dollar value are in arrears by one or more mortgage payments as of 31 March 2008. Other postcodes in the top 10 are: 4212 – Helensvale (Queensland), 2760 – St Mary’s (NSW), 2758 – Kurrajong (NSW), 2161 – Guildford (NSW), 2196 – Punchbowl (NSW), 2528 – Lake Illawarra (NSW), 2190 – Greenacre (NSW), 2766 – Rooty Hill (NSW) and 2165 – Fairfield (NSW). “Australian mortgage delinquencies have risen in the six months since this study was last completed but they remain relatively low. This study reveals the stark contrast in mortgage performance across regions - the worst performing region in Sydney is Fairfield-Liverpool with the proportion of mortgages one or more payments past due more than 3.5x that of the best performing regions of Sydney’s Eastern Suburbs and Lower North Shore. Clearly, increasing interest rates are not impacting the market in a uniform manner,” added Mr. McCarthy. The study includes over 947,000 loans with a total outstanding balance of over AUD160 billion as of 31 March 2008. The study was undertaken by Fitch to view mortgage performance on a more granular level than the traditional national statistics, and has identified a marked difference between the recent performances of various regions of Australia. NSW remains the worst performing state with Western Australia (WA) the best; however, despite the continued mining boom in WA, mortgage performance in WA is deteriorating at the fastest rate of all the states. |
