Brendan
18-06-08, 11:09 AM
As Reported in: Australia's biggest mortgage default areas | NEWS.com.au (http://www.news.com.au/business/money/story/0,25479,23883197-5013951,00.html)
TWELVE of the 20 areas with the highest mortgage delinquencies in Australia are located in New South Wales, according to credit rating agency Moody's Investors Service.
"I expect the short-term default rate to continue to rise, driven by the cost of living, such as higher petrol prices and so on,'' Moody's senior analyst Ilya Serov said.
Mr Serov said the effect of interest rate rises had not gone through the system fully and there had been a "small up-tick'' in the level of unemployment.
Delinquency rates had reached historical highs in the first quarter of 2008, The Australian (http://www.theaustralian.news.com.au/story/0,25197,23880976-25658,00.html) reports.
Home delinquents - worst performing areas
State ... Region ...................................... Rate (%)
NSW ... Sydney-Liverpool ....................... 1.43
NSW ... Sydney-Parramatta .................... 1.21
NSW ... Sydney-Canterbury-Bankstown ... 0.95
NSW ... Sydney-Other western ................ 0.93
NSW ... Sydney-South West ................... 0.90
NSW ... Central Coast ............................ 0.80
NSW ... Wollongong ............................... 0.77
QLD .... Mt Isa & North West QLD ........... 0.70
NSW ... Sydney-Inner West .................... 0.68
NSW ... Central Tablelands ..................... 0.63
NSW ... South Coast .............................. 0.62
TAS ..... Tasmania-North East ................. 0.61
TAS ..... Tasmania-North ......................... 0.60
VIC ...... Melbourne-North West ............... 0.59
But Mr Serov said that, coming from a low base, the level of defaults was not yet affecting ratings of residential mortgage-backed securities (RMBS).
The report says defaults were most prevalent among borrowers with high loan to value ratios (LVRs) (more than 90 per cent), "low doc'' (limited documentation) and "no-doc'' (no documentation) loans. Lending of low-doc and high-LVR loans peaked in 2006 and 2007.
Moody's found that the proportion of loans with 95 per cent LVR rose from negligible levels in previous years to 4.7 per cent in 2006 and 14.2 per cent in 2007.
Read the full report in The Australian (http://www.theaustralian.news.com.au/story/0,25197,23880976-25658,00.html).
TWELVE of the 20 areas with the highest mortgage delinquencies in Australia are located in New South Wales, according to credit rating agency Moody's Investors Service.
"I expect the short-term default rate to continue to rise, driven by the cost of living, such as higher petrol prices and so on,'' Moody's senior analyst Ilya Serov said.
Mr Serov said the effect of interest rate rises had not gone through the system fully and there had been a "small up-tick'' in the level of unemployment.
Delinquency rates had reached historical highs in the first quarter of 2008, The Australian (http://www.theaustralian.news.com.au/story/0,25197,23880976-25658,00.html) reports.
Home delinquents - worst performing areas
State ... Region ...................................... Rate (%)
NSW ... Sydney-Liverpool ....................... 1.43
NSW ... Sydney-Parramatta .................... 1.21
NSW ... Sydney-Canterbury-Bankstown ... 0.95
NSW ... Sydney-Other western ................ 0.93
NSW ... Sydney-South West ................... 0.90
NSW ... Central Coast ............................ 0.80
NSW ... Wollongong ............................... 0.77
QLD .... Mt Isa & North West QLD ........... 0.70
NSW ... Sydney-Inner West .................... 0.68
NSW ... Central Tablelands ..................... 0.63
NSW ... South Coast .............................. 0.62
TAS ..... Tasmania-North East ................. 0.61
TAS ..... Tasmania-North ......................... 0.60
VIC ...... Melbourne-North West ............... 0.59
But Mr Serov said that, coming from a low base, the level of defaults was not yet affecting ratings of residential mortgage-backed securities (RMBS).
The report says defaults were most prevalent among borrowers with high loan to value ratios (LVRs) (more than 90 per cent), "low doc'' (limited documentation) and "no-doc'' (no documentation) loans. Lending of low-doc and high-LVR loans peaked in 2006 and 2007.
Moody's found that the proportion of loans with 95 per cent LVR rose from negligible levels in previous years to 4.7 per cent in 2006 and 14.2 per cent in 2007.
Read the full report in The Australian (http://www.theaustralian.news.com.au/story/0,25197,23880976-25658,00.html).