We’re all completely clear of the fact that a steady job is the backbone of regular mortgage payments, with a worrisome trend has taken developed in Western Australia of late. From the beginning of 2017 till September the 30th 1,226 properties have been seized by banks. In other words, banks have repossessed an incredible number of homes this year because people have fallen behind in their mortgage payments.
The reason derives from the fact that a many of members of the working class have lost their jobs in the mining industry which used to be fairly strong in these parts of the country. This also explains why the majority of the seized properties is mainly in the outer suburbs.
There has been a so called shake out because of the end of the mining boom in those areas. Such a job while not an elite one, still provides workers with a steady income and possibly a good pension. When you lose your job, however, you do not instantly lose your home. An average Australian family can survive about 12-24 months without falling behind in their mortgage payments. Eventually, the inevitable will happen and you will be left with very limited options.
Some statistical data shows us that almost 4% of the owners in Mandurah have fallen behind when it comes to mortgage payments. We are talking about slipping 30 days or more. History shows us that there was a similar shake-out in the past as well. It took place in 2011 but the rates were not as high. In fact, the rates were twice as low meaning that only 2% of homeowners were missing mortgage payments.
The problem is further thoroughgoing because other parts of these towns have no problem coping with their payments. The market looks as if it has two tiers right now. Most suburbs are just fine and people have enough money to pay regularly for housing. This goes to show us exactly that planning your work and your housing situation is crucial. Making real estate decisions isn’t easy.
Unfortunately, in this case even if you wanted to sell your house earlier and move away, that would also mean that you would have needed to quit your job.
Even though there is no official data from the Supreme Court on separate regions into which homes are seized, we can see data regarding missed payments by area. By looking at it, we see that the inner-city of Perth is doing fine, delinquency rates have gone up very little – 1.1%. All in all, problems related to mortgage show us that there is some sort of an underemployment issue.
Another problem is related to the cost of living that people have. Once you settle with a very decent job, it is hard to switch it for another one for less money. Yes, you do get a regular stream of income again, but it isn’t sufficient to serve your needs.