Queensland worst in arrears performance

by 22 Aug 2012

Queensland is still the worst-performing state in mortgage performance, with 30+ days arrears rising to 1.86% at end March 2012 from 1.70% six months earlier.

New figures from Fitch Ratings show that the delinquency rate in Queensland is above the average 1.6% delinquency rate across Australia, up 18bp from 1.42% in September 2011.

The regions located south of Brisbane (Ipswich, Logan and the Gold Coast) are among the worst-performing regions in Australia, but Brisbane rates are below the national average.

While Queensland arrears do not show signs of stabilisation, WA continues to show a more discernable improvement in mortgage performance compared with the rest of the country.

“Arrears in WA have improved above average and increased less than other states, exhibiting an overall downward trend,” said Fitch’s James Zanesi.

“The improvement was particularly noteworthy in the 90+ days bucket in regional WA, where the arrears had built up due to a stagnating housing market, indicating an increasing clearance rate for secured properties of delinquent loans.”

The delinquency rate in WA worsened only marginally to 1.59% in March 2012, from 1.50% six months before. No region in WA was among the worst-performing regions.

Delinquencies in South-West WA, which was the eighth worst-performing region in Australia in September 2011, dropped 32bp to 1.85% as of March 2012. Central metropolitan Perth also experienced a significant improvement in delinquency levels and it was the fifth best-performing region in Australia as of March 2012.

Fitch expects the Australian mortgage market to improve in the third quarter of 2012 following the Reserve Bank’s decision to further reduce the cash rate by 50 basis points in May 2012 and 25 basis points in June 2012.