Interpac Business and Migration Solutions Melbourne Australia

(August 23, 2010)

HOME repossessions in Victoria have fallen to nearly half the levels seen during the global financial crisis, with just 1906 Supreme Court applications in the past financial year.

In the previous year - between July 2008 and June 2009 - 3080 applications for home repossessions were heard by the Supreme Court.

As a result, only 321 people had their homes repossessed by the Sheriff's Office between July 2009 and June 2010, substantially lower than the 500 repossessions for the corresponding period the year before.

The figures suggest Victorians, while struggling with high interest rates and home prices, are still managing to service their mortgages effectively and keep a roof over their heads.

The level of household debt in Australia has risen over the past three decades from less than 50 per cent of household disposable income to about 150 per cent.

Figures from the Australian Prudential Regulation Authority show home loan lending to owner-occupiers reached $664 billion in June this year, while credit card lending rose to $38 billion.

That figure is up from home loan lending in January of $636 billion and $37 billion for credit cards.

A Moody's Investor Services report tracking residential mortgage-backed securities - a market for loans issued by banks and other lenders - suggests Melbourne is performing reasonably well in terms of loans arrears.

The report, compiled by structured finance senior analyst Arthur Karabatsos, breaks down loan arrears by geographic region and shows some areas in Melbourne are coping better with the mortgage stress than others.

Suburbs in the south-east region - encompassing Cranbourne, Cockatoo and Cardinia - were struggling more than others, with between 1.5 and 2 per cent of loans being in arrears.

The study defined loans in arrears when one or more mortgage repayment was missed in a month.

Mr Karabatsos said Melbourne was performing relatively well when compared to NSW and the rest of the nation.

Australia as a whole was performing well when compared with other countries like Britain, United States and Spain, the report said.

Non-conforming and credit-impaired borrowers represent only 1.5 per cent and 0.5 per cent respectively of the residential mortgage-backed securities market in Australia, whereas in the US 20 per cent of loans are in the subprime category.

(Source:theage.com.au)