Australia’s coastal regions, where tourism is the main cash driver, are more likely to default on home loans, according to the latest research from global ratings service Fitch.
Gold Coast East, Sunshine Coast and South West Western Australia are among the 20 regions with the highest proportion of home loans that are over 90 days overdue, Fitch research showed.
Coastal areas that rely on tourism are more affected by the high Australian dollar and less affected by monetary policy, Fitch associate director James Zanesi said.
The highest amount of home loans in arrears is to be found in Montrose in the northern suburbs of Hobart, Tasmania, where over 3.2% of borrowers have loans over 30 days overdue. Inner city loans, especially in Melbourne and Sydney, were the best performers scoring 0.68% above the nation’s average.
Overall, the number of delinquent borrowers fell by 1.2% across Australia as a result of consecutive interest rate reductions in 2012. Results are expected to improve further in the first months of this year, taking into account that rate cuts take a couple of months to take effect on the market, Nine MSN reported.
Australia’s central bank has kept the official cash rate unchanged at 3% for February but borrowers can still switch to the lowest home loan rate available on the market through simple home loan comparisons.