Australia’s 50 most delinquent regions

Courtesy of today’s Fitch report into the geographic distribution of Australian mortgage delinquencies. Here are the top 50 most delinquent regions by dollar amount:

Comments

          • Yeah my business is being smashed by the dollar, and I live in a tourist town where my house is worth less every day. I can’t get enough of this mining boom 🙂

            Perhaps a real estate show called “The Biggest Loser” might work in this environment?

        • Torchwood1979

          Boo hoo, I don’t even make the list! But I’m considering buying on the inner areas of #48.

        • The audacity of some NSW dead beat tourist town beating FNQ tourist towns in “The race to the bottom” is appalling 🙂

          FNQ 19th position

      • Sandgroper Sceptic

        Yes same as SouthWest WA. Probably three factors here:
        (1) Many, many holiday homes down there, or second homes and they are pouring onto the market in huge numbers.
        (2) Tourism also affected though, high dollar means many Perthites are heading for Bali/Thailand etc, rather than jump in the car for Margaret River.
        (3) Start of the demographic wave…Baby boomers unloading their property to fund their European travels.

    • Yep that is definitely a rising trend across the board.

      Didn’t the banks just produce some nice profits based on lowering their bad debt provisions ??

      Maybe time to re-visit those balance sheets.

      • How many of these loans are actually still on their own balance sheets? I would have thought many of these would be non-conforming in some way shape or form, meaning that they have long since packaged them up and sold them off, only to “manage” them on behalf of our the buyer (probably our gracious government to some extent.)

  1. Torchwood1979

    Good to see that mining boom II has restored the QLD RE market to its former glory.

  2. I would love to see what proportion of those delinquencies are not covered by Mortgage insurance. Even better, track down those who are the insurers and see how the market is pricing them.

    But don’t fall into the trap of seeing some failure as evidence that the whole system is about to crumble. Some failures are inevitable, the better question is: “are they more than the system can be expected handle?” Is it realy evidence of systemic risk that can feedback into more instability?

    Look at it like this:

    A doctor is proposing an operation that has a 1/100 chance of serious complications. From the patients point of view, that is pretty good odds and says “yes”. But the doctor is a specialist and performs 250 of these a year, from he’s point of view there is a near certainty that he will experience a patient with complications. Does he say “No” to doing the opperation?

    Banks lend money to marginals, Doctors still opperate, Engineers still crash test cars, Ministers buy back water. And all of them do this knowing that despite their best efforts, there is a certainty of some failures.

    This housing bubble might just end slowly as an inflation adjusted mirror fall back to the average H$/earnings range. No Godzilla stomping around biting train carriges in half. No sky falling.

  3. > This housing bubble might just end
    > slowly as an inflation adjusted mirror
    > fall back to the average H$/earnings
    > range. No Godzilla stomping around
    > biting train carriges in half. No sky
    > falling.

    It’s too early to say how it will end. Note the confluence of pretty bad factors both internal and external. We have struggling retail, manufacturing and services. SMEs are going bust in large numbers. Cost of living is stll pretty high. Externally we have slowing US, troubled Europe, Japan and significant inflation in China.

    • >It’s too early to say how it will end.

      Thats my point, there are a lot of hopefulls for the sudden fall scenario and I am trying to balance that out.

      If the stagnation scenario is the best amongst bad choices, then the question is have the Fed govt and reserve bank got the means to make it so?

    • I’m still trying to work out if negative gearing will make a fast bust more likely or not. Best guess is rubber band effect, build up of resistance till it snaps!

  4. Remember it was Fitch that conducted a “stress test” of Aussie banks and found that they all could survive a 40% fall in house prices- no worries mate.
    .
    If Fitch is biased enough to reach this laughable conclusion, then I expect the actual arrears figure to be much worse.

  5. The Hunter is really interesting. House prices there are almost on par with Sydney despite far lower wages, yields to often questionable tenants are microscopic, building boom has been huge, and the place has a culture of intro rate / take out a loan get a free holiday type mortgage lenders… there is one on almost every corner. The residents must have absolutely enormous debt levels, and being a property investor is as natural as breathing up there. They have coal mining which apparently makes it all ok, its the spot to watch the battle of mining boom vs end of credit boom

  6. seen it coming

    I sold my Logan property in late 08 and it has been on the market again for 6 months now, with downward price revisions to a price that reflects growth of 1% pa. This does not account for outgoings and repairs. It was the cheapest,well positioned nice home in the area for sale when I bought and sold it ( to an agent!) and the return reflects my long held beliefs that the days of easy capital growth are over. In 08,09 and 10 people were still paying well over the fair value and defaults now are not surprising. What is worse is that if capital losses occur,all hell will break loose. We live in interesting times.

  7. Thanks for the info! – puts me at #20 (although we are 68% equity having avoided the boganesque redraw offer or 2)

    Whilst still on this matter I would like to draw some attention to something I received in the mail today which may help illuminate why a list like this even exists.

    (I would particularly like to point out the ‘double dip’ of bank contributions in the second and third expense rows…)

    The interesting part of all this is that I acquired this card whilst I worked in the Pilbara so the limit is around $15k (from memory), we have never even used HALF of it and never even paid interest.

    Clearly they (our friendly big 4) are clutching at straws.