Gladstone, Mackay, Rocky among the worst for home defaults
GLADSTONE and Mackay are separated by 445.3km of the Bruce Hwy but it appears the two towns have plenty in common when it comes to people not being able to pay back loans.
Figures on mortgage defaults released by the global financial firm Moodys revealed both the Mackay and Fitzroy regions, of which Gladstone is a part of, are two of the worst performing regions in Australia.
With a delinquency rate of 2.78% Mackay takes the cake as the country's worst performing region.
But the Fitzroy region, which stretches north from Rockhampton, west of Emerald and south of Agnes Water, isn't far behind with a delinquency rate of 2.52%.
To put that in perspective the national average is sitting at 1.34%.
"A high proportion of the worst performing regions were in areas where employment is highly reliant on industries directly or indirectly related to mining and resources," the report stated.
"The three regions that recorded the biggest increase in delinquencies are exposed to the mining industry.
"Delinquencies in Fitzroy…increased by 1.21 percentage points…[which made it] the worst deterioration of any region in Australia," the report found.
From 2005 to 2007 when both towns were booming Mackay and Fitzroy were among the best performing regions in Australia.
Some readers, whose house values have plummeted over the last year, may find it cold comfort to know in Gladstone's CBD and surrounds, the mortgage delinquency rate is 1.41% --- putting it just above the national average.
Gladstone mortgage broker Ruan Berger said the connection between the downturn in the resource sector and the increase in mortgage delinquencies was simple.
"When people can't keep their jobs they can't make their repayments," Mr Berger said.
"It's quite dismal to say the least…the reality is that it's a tough market because unemployment is high in those areas and people who bought at the high end can't sell because their loan is bigger than what the house is worth.
"This isn't just happening in one place but you've just got to hope something good is on the horizon for Gladstone and if we can hang on long enough to ride this wave out," Mr Berger said.
Mr Berger believed the key to get through this bust period was to remain positive, increase confidence and realise that there are still plenty of businesses in Gladstone that are "doing very well".