If it wasn’t bad enough that Alboflation has gutted real wages, Australia’s lower-income jurisdictions are also suffering the worst mortgage defaults.
Moody’s with the note:
Mortgage delinquency rates will continue to rise across Australia. Average mortgage delinquency rates increased in every Australian state, territory, capital city and most regions over the year to May 2023. We expect delinquency rates will continue to rise moderately through to the end of this year as high interest rates and cost-of-living pressures further erode household savings. Rising mortgage delinquency rates are credit negative for the residential mortgage-backed securities (RMBS) sector.
Mortgage delinquencies are rising most in low-income areas outside of major cities. While mortgage delinquency rates are rising broadly across Australia, this is most pronounced in regions where median household income is in the bottom third of the state. These regions are also typically outside metropolitan areas. Mortgage borrowers in these areas are bearing the brunt of high interest rates and inflation.
Recovering housing prices and a strong job market will mitigate mortgage delinquency risks. Despite the increased strain on mortgage borrowers from high interest rates and inflation, we expect mortgage delinquency rates will only rise moderately for the rest of this year because of low unemployment and recovering housing prices.
Not to worry, Albo’s real target, the city slickers that might vote Green, are creaming it:
Unless they rent!
