Mortgage deferral hotspots revealed

by Madison Utley01 Oct 2020

The ten mortgage deferral hotspots from the first wave of COVID-19 lockdowns have been revealed, providing insight into the ability of Australians across the country to meet their mortgage repayments as many deferrals are imminently due for review.

The Equifax analysis shows nine out of the top ten regions were Queensland tourist destinations, with Noosa, Surfers Paradise, Coolangatta, Mudgeeraba-Tallebudgera, Broadbeach-Burleigh, Southport and the Gold Coast Hinterland containing a higher proportion of deferrals compared to the national average.

“The impact of the downturn on tourist trade is acute for Australians living in tourism-dependent Queensland regions,” said Kevin James, Equifax general manager advisory and solutions.  

“Tourism is a major industry for Queensland, and with international and domestic visitors curtailed during the pandemic, tourist hotspots have faced reduced occupancy rates, lower incomes and higher levels of unemployment leaving mortgage holders feeling the pinch.”

However, with the Queensland border set to reopen to parts of New South Wales and South Australia this week, Equifax has predicted the beginnings of a bounce back as tourism dollars begin to again flow into the region.

The group’s analysis was conducted in September 2020 and based on credit history and repayment information available for the month of May 2020. Given this timing, Tullamarine-Broadmeadows, on the outskirts of Melbourne, was the only non-Queensland location to make it into the top ten list of mortgage deferral hotspots.

That said, Wyndham, Casey-South, Whittlesea-Wallan, Melton Bacchus Marsh and Boroondara still exhibited a high number of mortgage deferrals than the national average, given the areas’ status as lower socio-economic suburbs with low-income households and young people just starting out on the property ladder.

“COVID-19 is having a particularly negative effect on the employment of young people,” James confirmed.

“For those without significant savings, it isn’t easy to service a home loan when cash flow dries up.

“We know Melbourne’s second lockdown will have further exacerbated the difficulties we’ve seen in our initial analysis on the available May data,” he finished.