Investors more likely to default: Fitch

by AB06 Feb 2013


Property investors are more prone to delinquencies than owner-occupiers, new research has found.
Fitch Ratings has revealed a study showing arrears for investor loans were 1.51 times that of loans to owner-occupiers.
"Fitch believes that investment property loans will have a higher probability of default in an economic downturn, as borrowers will try harder to protect their primary residence than an investment property," the ratings agency said.
Fitch said investment loans had a 25% higher base default probability.
The study also found that mortgage performance improved across Australia as a result of interest rates easing. Delinquencies fell to 1.2% nationwide as of the end of September 2012, down from 1.86% at the end of March 2012.
But Queensland has lagged the rest of the country in delinquencies. The natural-disaster ravaged state has seen delinquencies fall overall, but the 10 worst-performing regions in the country were all in Queensland.