Suburb among highest for home defaults

Mt Melville has been listed among the country’s riskiest top 20 suburbs defaulting on mortgage payments.

Digital Finance Analytics has used data based on a rolling survey of 26,000 households to estimate the probability of default and report actual mortgage stress of suburbs across Australia.

According to the analysis, Mt Melville recorded a 4.16 per cent probability of default, the third highest in the country, with an estimated 188 households at risk of default on mortgage payments this year.

DFA principal Martin North said slow wage growth and the declining mining sector would affect the region this year.

“Real take-home incomes in the area are expected to fall in real terms, as wage growth is lower than inflation, whilst costs are rising,” he said.

“Job availability is under pressure, and demand for rental property is falling due to reduced numbers of FIFO workers, who supported investment property in the region.”

The analysis also looks at existing mortgage stress.

In December around 28 per cent of households in Mt Melville were experiencing mild mortgage stress, while 2.6 per cent were under severe mortgage stress.

Mild stress is defined as maintaining repayments but expenditure is being reprioritised, while severe stress means households are behind with their repayments or being foreclosed.

Mt Melville’s median individual income is $570 a week, according to the analysis, and the median household income is $1065 a week.

The median rent is $250 a week, with the median mortgage repayment at $1560 a month.