Struggle to keep homes

MORE Territorians are battling to keep their homes, with figures showing we have had the biggest spike in the nation in mortgage arrears.

Territory home arrears rose sharply in January – climbing to 2.25 per cent, up 0.56 per cent from December – and continue to be well above the national average.

The number of arrears has slowly climbed since October, when they were at 1.57 per cent.

Only Western Australia leads the Territory for homeowners under stress. The number of mortgage arrears in WA stands at 2.44 per cent, up 0.36 per cent from December.

According to Standard & Poor’s latest Arrears Statistics report, delinquent housing loans contained in Australian prime residential mortgagebacked securities rose to 1.3 per cent in January, up from 1.07 per cent in December.

“Loans in arrears by more than 30 days increased in January in every state and territory,” Standard & Poor’s said.

It said most of the rise in arrears was attributable to borrowers in WA and the NT, whereas loan quality had improved in NSW, South Australia and Tasmania.

“Western Australia re- tained its position as the home of the nation’s highest arrears and the Northern Territory was second,” Standard & Poor’s said.

The January spike in home loan arrears comes in the wake of a gloomy warning from former federal treasurer Peter Costello that homeowners should brace for “painful” consequences as global interest rates rise from historically low levels.

The most vulnerable borrowers, according to Standard & Poor’s, were those with interest-only loans approaching the end of the interest-only period, when monthly repayments jump by about 50 per cent. Borrowers who had saved small deposits and heavily indebted households were also areas of concern.

“Improving employment conditions will help keep defaults low, but rate rises will have an impact on borrowers,” said Standard & Poor’s.

The Australian Bureau of Statistics (ABS) Labour Force Report shows there are 5000 fewer people employed in the Northern Territory (full-time), compared with the same time last year.

ABS figures also show that the Northern Territory is the only jurisdiction where population growth is flat.