Christmas overspending has driven an increase in home loan delinquencies.
A new Fitch report shows arrears edged up slightly for March, rising to 1.35% from 1.24% at the end of September 2013. The ratings agency put the increase down to Christmas overspending, but said arrears were down 10bps on a year-on-year basis.
While Queensland was the worst performing state for arrears with a delinquency rate of 1.42%, Fitch said Victoria was the only state to see a year-on-year increase in delinquencies. Seven of the 20 worst performing suburbs in Australia were in Victoria, while no region in the state was among the best performing.
"Hume City, Victoria (VIC), continued to be the worst-performing region in Australia with a 30+ days delinquency rate of 2.93% at end-March 2014, the highest level since early 2008. Hume (VIC), Melton-Wyndham (VIC) and Northern Outer Melbourne continued to show a significant deterioration in mortgage performance and in the six months to March 2014 the delinquency rate in these regions increased on average by 59bp, compared with an average rise of 11bp nationally," Fitch said.
Budgewoi on the Central Coast of New South Wales was the worst performing postcode in the country, with a 30+ day arrears rate of 3.7%. The suburb has now been among the 20 worst postcodes each March and December for five years, with the exception of September 2012.
