Queensland has the highest delinquency rate in Australia, as an increase in insolvencies and unemployment and declines in home prices in parts of the state weighed on borrowers’ ability to pay, Fitch Ratings said.
About 1.86 percent of home loans were more than 30 days overdue as of March 31, from 1.7 percent on Sept. 30, and compared with an average of 1.6 percent across Australia, Fitch Ratings said in its Mortgage Delinquency by Postcode report. The Gold Coast, Ipswich and Logan, cities south of the capital Brisbane, have been the worst performers since March 2011.
“For the first time since this report was first published, most of the 10 worst-performing regions are in Queensland,” James Zanesi, an analyst at Fitch, wrote in the report. “Fitch is currently monitoring the development of delinquency rates across Queensland to determine whether this is a temporary situation or a long-term trend.”
Home prices in southeast Queensland’s residential market, where the Gold Coast, Ipswich and Logan are located, are not experiencing the improvements seen in Brisbane, CBRE Group Inc. said in a release in June. While the Queensland economy has benefited from expansion in the resources sector, the state’s tourism, manufacturing and construction industries continue to struggle, the property broker said.
The number of personal insolvencies in Queensland rose 18 percent in the year to March 2012, and the unemployment rate in Ipswich rose to 7.4 percent in March from 6.3 percent a year earlier, Fitch said.
Six of the 10 worst-performing regions in Australia by value were in Queensland and the rest in New South Wales, Fitch said.