Victorian postcodes where we struggle most to pay mortgages revealed
The number of Victorians struggling with their mortgages has hit a two-year high — and the situation is expected to get worse before it gets better.
Falling Melbourne house prices could exacerbate the strain on households already feeling the financial pinch, leaving them in a poor bargaining position if they need to sell.
The Moody’s Investor Services Australian Mortgage Delinquency Map named the Mulgrave area the state’s worst performing postcode with about three in every 100 homeowners at least a month behind on mortgage repayments.
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But despite more loan-holders falling behind, Victoria is still ahead of the Australian average with 1.39 per cent of homeowners 30 days behind on their mortgage payments compared to 1.58 per cent nationwide, according to Moody’s Investor Services.
Moody’s Investor Service VP-senior analyst Alena Chen said the declining market put those behind on their mortgage payments at greater risk of worse outcomes than in past years, when the market had been rising.
“In a declining market, if someone is unable to make their payments (and) they need that additional option of selling, it’s not as easy now as before,” Ms Chen said.
And despite the economy still performing well, it’s expected the number of homeowners falling behind on their mortgage will rise in the coming year.
“Over the next 12 months, we do expect it to increase,” Ms Chen said.
The previous worst performance came in 2016, when 1.43 per cent of Victorian mortgages were in arrears.
VICTORIA’S TEN WORST POSTCODES
3170 — Mulgrave — 3.57%
3037 — Sydenham — 3.12%
3008 — Docklands — 2.95%
3064 — Craigieburn — 2.85%
3023 — Burnside — 2.77%
3630 — Branditt (Shepparton) — 2.76%
3840 — Driffield (Gippsland) — 2.64%
3178 — Rowville — 2.53%
3976 — Hampton Park — 2.51%
3020 — Albion — 2.34%
The report also revealed the city’s postcodes with the highest delinquency rates.
The Mulgrave area was the worst with 3.5 per cent of home loans in arrears — the 15th highest figure in Australia.
The latest CoreLogic figures show the suburb’s median house price fell $50,000 (5.6 per cent) to $850,000 last year.
Biggin & Scott director Ming Xu said he had encountered some sellers who were putting their homes up for sale and seeking a quick result, but had not yet bought a new home.
This could indicate they were selling because of an out-of-control mortgage, putting buyers even more in control, he said.
Modest price reductions in Mulgrave, providing it with new-found affordability, were proving popular with buyers following a reverse ripple effect — coming in from suburb’s further out.
“Properties are still selling if they are priced well, presented well and located well,” Mr Xu said.
Ms Chen said the poor-performing postcodes could be an indication of a higher than average number of investor or interest-only loans, which were more likely to be behind in their payments.
“But we have done separate research where the further away the property is located from the metropolitan centre, we do see a worsening performance,” Ms Chen said.
The research sampled 505,000 loans worth a combined $120 billion.
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