Melton home owners struggling to meet repayments are unlikely to benefit from this month’s interest rate cut, with high unemployment and low wages cited as the drivers of mortgage delinquency.
The latest Fitch Ratings Mortgage Delinquency report revealed mortgage defaults in Hume, Melton and Wyndham were higher than other regions across the nation.
“Fitch expects these regions to continue to perform poorly relative to other locations as their performance is driven by socio-economic variables and the local economies,” the report states.
For the first time, postcode 3037 – which includes Calder Park, Delahey, Hillside, Plumpton, Sydenham and Taylors Hill – was pinpointed as the nation’s eighth-worst-performing postcode with 1.7 per cent of home mortgages at least 30 days in arrears. And bankruptcies in this area jumped by 36 per cent in the past financial year.
In the Melton-Wyndham region, 1.2 per cent of mortgages were at least 30 days in arrears.
Fitch Ratings director James Zanesi said people living in the outer suburbs were more “sensitive” to shifting interest rates, but general expenses played a larger role in mortgage performance.
“In the current environment, variables such as unemployment, divorce, sickness and wages are more of a driver than lowered interest rates,” Mr Zanesi said.
“Even if interest rates are zero per cent, you will have delinquencies because people aren’t able to make repayments.”
Mr Zanesi said home owners in Melbourne’s north and west were also defaulting on their repayments longer than their inner-city counterparts.
More than 26 per cent of Melton residents are in mortgage stress, Melton Mortgage Wellbeing Service has found. It defines ‘stress’ as when households spend more than 30 per cent of income on mortgage repayments.
Melton bankruptcies have remained stable.
