Home loan arrears hit five-year high with mining regions suffering most

first_imgEight of the 10 regions with the highest 30-plus delinquency rates were in either Western Australia or Queensland. Picture: iStockHOME loan arrears have hit a five-year high, with Queensland and Western Australia in the crosshairs, the latest Moody’s Investors Service report has found.Moody’s vice president and senior analyst Alena Chen said regions with exposure to the resource and mining sectors dominated the list of areas with the highest delinquencies in May 2017. “Eight of the 10 regions with the highest 30-plus delinquency rates were in either Western Australia or Queensland, and many of these regions are exposed to industries directly or indirectly related to mining and resources.”HIP POCKET: Household debt front and centre: RBA AWARD-WINNING: Take a tour: State’s best homes of 2017 More from newsMould, age, not enough to stop 17 bidders fighting for this homeless than 1 hour agoBuyers ‘crazy’ not to take govt freebies, says 28-yr-old investorless than 1 hour agoWEEK’S BEST: This home sale has topped QLD Moody’s Investors Service said the proportion of Australian residential mortgages more than 30 days in arrears rose to 1.62 per cent in May 2017, which was the highest rate seen in five years. In May 2016, it was at 1.5 per cent.Analysts expected to see delinquencies continue to increase this year because of weaker conditions in areas that rely on mining, high underemployment and a less favourable housing market.“The mining downturn has dampened economic growth in resource-reliant states, such as Western Australia, the Northern Territory and Queensland, and we expect this situation will weigh on mortgage performance for some time.”Underemployment was estimated at 8.57 per cent on average nationwide in August, with unemployment at 5.6 per cent.“Underemployment results in lower income and reduced capacity to make mortgage repayments, increasing the risk of delinquencies and defaults,” Moody’s said. *Follow SOPHIE FOSTER on Twitter and Facebooklast_img

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