Western Australia has highest delinquency rate in the country

Western Australia has the highest loan delinquency rates in the country with two percent of its home loan payments delayed by more than a month compared to the national average of 1.54 percent says Fitch Ratings.

This is a first for the area and delinquency rates are only expected to worsen any time growth in the mining industry slackens or if interest rates continue to increase.

In the state’s capital city of Perth, 2.1 percent of home loans were in arrears for more than 30 days as at Sept. 30, and 2.8 percent of payments late in the state’s south-west, Fitch said in an emailed report. Overall, 2 percent of Western Australia’s loans were late by 30 days or more, Fitch said, compared with a national average of 1.54 percent.

“In parts of Western Australia, people were expecting house price appreciation, and may have speculated,” James Zanesi, lead author of the Fitch report, told Bloomberg. “It’s not so much about the economy itself, but that people in these areas are more sensitive to interest rate movements and stagnation in house prices.”

According to RP-Data, housing rates in Perth dropped by 3.8 percent in the last three months to Oct. 31 while prices in Sydney rose by 0.2 percent and Melbourne rates rose by 1.2 percent. The slow price growth was affected by the recent interest rate increase announced by the Reserve Bank of Australia and made buyers wary of purchasing homes.