The COVID-19 outbreak has affected the finances of many Australians, particularly of homeowners who are still paying off their mortgages. To help ease the financial burden some Australian homeowners have to carry amid the pandemic, banks offered support in the form of mortgage deferrals, giving borrowers the necessary breather from monthly repayments.
An Equifax study mapped out the areas where borrowers are most likely to defer their mortgages. The study analysed credit history and repayment information of Australians in the early months of COVID-19.
It found out that nine of the top 10 regions for mortgage deferrals during the first wave of lockdowns were in Queensland tourist destinations. These regions include Noosa, Surfers Paradise, Coolangatta, Mudgeeraba-Tallebudgera, Broadbeach-Burleigh, Southport and the Gold Coast Hinterland.
Kevin James, general manager for advisory and solutions at Equifax, said the impact of the downturn on tourist trade has been acute for homeowners in tourism-dependent regions in Queensland.
“Tourism is a major industry for Queensland, and with international and domestic visitors curtailed during the pandemic, tourist hotspots have faced reduced occupancy rates, lower incomes and higher levels of unemployment leaving mortgage holders feeling the pinch,” he said.
Melbourne’s Tullamarine-Broadmeadows is the only non-Queensland location in the top places for mortgage deferrals. Still, the Equifax study found that many suburbs in Melbourne’s fringes have showed signs of increased mortgage stress in May 2020.
In fact, locations such as Wyndham, Casey-South, Whittlesea-Wallan, Melton-Bacchus Marsh, and Boroondara had higher incidences of mortgage deferrals in the month than the national average. James said these are lower socio-economic suburbs with low-income household.
“COVID-19 is having a particularly negative effect on the employment of young people. For those without significant savings, it isn’t easy to service a home loan when cash flow dries up,” he said.
Of the age groups, Australians in the 36-45 age range are the most likely ones to defer their mortgages. Middle-aged Australians are more likely to seek mortgage relief as they have relatively high outstanding mortgage balances.
Published at Sun, 04 Oct 2020 17:58:07 +0000