Mort­gage de­fault risk high

Pilbara News - - Front Page - Tom Zaun­mayr

Kar­ratha has been iden­ti­fied among a list of Aus­tralian post­codes most at risk of mort­gage de­fault this year as house prices in the re­gion hit rock bot­tom.

Dig­i­tal Fi­nance An­a­lyt­ics data ranked Kar­ratha house­holds most likely to de­fault on mort­gage re­pay­ments on a list of 20 wealthy Aus­tralian sub­urbs ex­pe­ri­enc­ing fi­nan­cial strain. DFA es­ti­mated 151 bor­row­ing house­holds in Kar­ratha would de­fault on mort­gages in 2017.

Ray White Kar­ratha li­censee and Real Es­tate In­sti­tute of WA Kar­ratha chair­man Richard Naulls said he ex­pected more mortgagee sales this year but we had been through the worst of it.

“At one point about 25 per cent of mar­ket list­ings were mortgagee sales — I think that is down be­low 10 per cent at the mo­ment,” he said.

“In­quiries from mort­gagees to do ap­praisals has dropped right off in the past three to six months, so hope­fully that is a pos­i­tive.

“Num­ber of sales has in­creased, num­ber of mul­ti­ple of­fers on prop­er­ties . . . is in­creas­ing, and num­ber of list­ings com­ing on the mar­ket has de­creased.”

Mr Naulls said he ex­pected house prices to re­main steady this year be­fore pick­ing up in 2018.

DFA prin­ci­pal Martin North said the es­ti­mated de­fault rate in Kar­ratha for 2017 had risen from 1.7 per cent of bor­row­ing house­holds in 2016.

“The rea­son is the in­comes are un­der pres­sure, and af­ter the mining boom we are see­ing some­thing of a correction in prop­erty values,” he said. “Em­ploy­ment is un­der pres­sure and costs of liv­ing are ris­ing fast but the killer is the ex­pected lift in mort­gage rates.”

The data was com­piled by house­hold sur­veys tak­ing into ac­count fac­tors such as ex­pected rate rises and changes in em­ploy­ment.

The DFA list ranked Man­durah (4.17 per cent) and Mt Melville (4.16 per cent) bor­row­ers as sec­ond and third most likely to de­fault.

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