Shock RBA warning to hit 100 suburbs on watchlist

Reserve Bank boss warns more people could be forced to ‘sell their homes’, as new data pinpoints 100 suburbs on a watchlist for reduced price sales.

Reserve Bank boss warns more people could be forced to ‘sell their homes’, as new data pinpoints 100 suburbs on a watchlist for reduced price sales.

RBA Governor Michele Bullock warned her “message on interest rates is not what many borrowers want to hear” especially “as labour market conditions ease, more households will experience a strain on their finances from unemployment or reduced working hours.”

Ms Bullock said RBA estimates around 5 per cent of owner-occupiers were “in a particularly challenging situation, where the combined total of their essential spending and scheduled mortgage repayments is more than their income”.

RBA Governor Michele Bullock talks to attendees after she gave a speech on the costs of high inflation at an Anika Foundation luncheon Thursday. Picture: NewsWire / Max Mason-Hubers

“Some may ultimately make the difficult decision to sell their homes,” she warned, with lower income borrowers “over-represented in the group of people who are really struggling”.

Millions of dollars worth of Aussie homes have already been seized for mortgagee sales from McMansions to townhouses and inner city apartments, with S & P Global Ratings naming the 10 hardest hit postcodes which contain 100 suburbs in trouble.

SCROLL DOWN TO SEE TABLE OF SUBURBS

The worst hit is postcode 2170 in NSW where 3.16pc of home loans are in arrears, covering a dozen suburbs including Casula, Liverpool, Liverpool South, Moorebank and Warwick Farm.

The Australian Financial Complaints Authority says “sometimes the financial firm will advertise its sale of the property as mortgagee” which “might suggest that it will be sold for a cheap price”.

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This three bedder at 30A Benny, South Brighton, in South Australia is already under offer after being seized by its mortgagee.

The AFCA said “reference to a ‘mortgagee sale’, particularly for an auction, can be positive as it might attract more purchasers” with the final sale price dependent “on the individual circumstances of the sale”.

Buyers have to be quick with the more affordable properties that are listed as mortgagee sales snapped up quicker than the luxury end, such as a three bed house at 30A Benny, South Brighton, South Australia that’s already gone under contract. It’s on a 392sq m block close to Seacliff Beach and Brighton Beach.

Over 100 suburbs are within the 10 worst performing postcodes alone across the country, with Victoria showing 2.81pc of home loans in arrears in postcode 3064 that covers Craigieburn, Donnybrook, Kalkallo, Michleham and Roxburgh Park. Other Victoria postcodes and suburbs are 3754 where 2.4pc are in trouble in the suburbs of Doreen and Mernda; and 3023 where 2.34pc of home loans are in arrears across Burnside, Burnside Heights, Cairnlea, Caroline Springs, Deer Park, Deer Park North and Ravenhall.

A two bed, two bath apartment high above Museum Station in the centre of Sydney is up for mortgagee auction on Thursday Sept 5 at 12pm. The address is 403/130 Elizabeth Street.

Only one Queensland postcode 4211 in the Gold Coast was among the top 10 worst performing areas for arrears, though it has 16 suburbs within it where 2.46pc in strife, including Advancetown, Beechmont, Binna Burra, Carrara, Clagiraba, Gaven, Gilston, Highland Park, Lower Beeechmonth, Mount Nathan, Natural Bridge, Nerang, Nerang DC, Numinbah Valley, Pacific Pines and South Lamington.

Western Australia also had a postcode in the top 10 worst areas 6112 where 2.14pc of home loans are in trouble in Armadale, Bedfordale, Brookdale, Forrestdale, Harrisdale, Haynes, Hilbert, Mount Nasura, Mout Richon, Piara Waters, Seville Grove, Wungong and Doobarda.

News South Wales had the remaining four postcodes in the top 10 including 2261 where 2.52pc of homeowner are in a world of hurt in 15 suburbs: Bateau Bay, Bay Village, Berkeley Vale, Blue Bay, Chittaway Bay, Chittaway Point, Genning Valley, Killarney Vale, Long Jetty, Magenta, Shelly Beach, The Entrance, The Entrance North, Toowoon Bay and Tumbi Tumbi.

In postcode 2148 2.26pc of those with mortgages are in arrears which spans Arndell Park, Blacktown, Blacktown Westpoint, Huntingwood, Kings Park, Marayong and Prospect.

Another one up for mortgagee sale is 22 Yalumba Place, Edensor Park, NSW, with a price guide of $1,800,000.

In 2259 postcode 2.18pc of mortgages are in arrears encompassing Alison, Bushells Ridge, Cedar Brush Creek, Chain Valley Bay, Crangan Bay, Dooralong, Durren Durren, Frazer Park, Freemans, Wandalan, Halloran, Hamlyn Terrace, Hilliby, Kanwal, Kiar, Kingfisher Shores, Lake Munmorah, Lemon Tree, Little Jilliby and Mannering Park,

Across postcode 2570 2.09pc per cent of home loans are in arrears now, which covers 20 areas Belimbla Park, Bickley Vale, Brownlow Hill, Camden, Camden Park, Camden South, Cawdor, Cobbitty, Elderslie, Ellis Lane, Glenmore, Grasmere, Kirkham, Mount Hunter, Nattai, Oakdale, Oran Park, Orangeville, Spring Farm and The Oaks.

Mortgagee sales are occurring at the higher price levels too with this 1.01ha estate up for grabs at 3 Sherbrooke Road, Sherbrooke, in Victoria.

The lush five bedroom property has a price guide of $2,400,000 – $2,550,000.

The newest luxury mortgagee sale right now is a 1.01 hectare rural estate – Sherbrooke Manor – listed with a price guide of $2.4m to $2.55m by Elliot Bell and Bryce McLean of Bell Real Estate Belgrave/Tecoma. The property at 3 Sherbrooke Road, Sherbrooke in Victoria has all the bells and whistles you could ask for in a country retreat, from an after dinner gentlemen’s room, to four fireplaces, original heritage detailing, framed views of the pool and garden, and a grand entrance to take your breath away.

This property at 172 Lower Plenty Road, Rosanna, Victoria has 17 bedroom, 14 bathroom, and 14 car spaces.

Several entire blocks of units to make you an instant millionaire landlord are also being put up for sale by mortgagees including 172 Lower Plenty Road, Rosanna, in Victoria which has 17 bedrooms, 14 bathrooms, and 14 carspots on a 1,037sq m block priced from $4.5m to $4.95m. David Blythe and Brad Pearce of Miles Real Estate Ivanhoe and Rosanna describe it having five two bedroom and seven one bedroom apartments with a fully leased market rental estimate of $284,000 a year gross income.

1-4/14 Fontainebleau Street, Sans Souci, NSW has four very spacious townhouses up for sale.

The townhouses are a stroll away from the beautiful St George Motor Boat Club.

Then there’s 1-4/14 Fontainebleau Street, Sans Souci, in NSW with 11 bedrooms, 10 bathrooms, and eight car spots in four townhouses listed by Tri Liu and Tuan Tran of Laing+Simmons – Cabramatta. It’s walking distance to St George Motorboat Club, local parks, schools, restaurants, and beaches and all townhouses are brand new.

Mortgagee sales are the final step in a process that can take six months, triggered after repayment defaults by a mortgagor/borrower and after a notice requiring overdue amounts be repaid is not complied with.

Mortgagees have taken over 37 Warne Terrace, Caloundra, for sale, and have been waiting for the right price to drop.

11a Noonbinna Crescent, Northbridge, NSW, is still on the market after mortgagees seized it.

Not all mortgagees will simply take the highest offer though with some never-to-be-repeated properties sitting on the market for several months. A home built at 37 Warne Terrace in Caloundra in Queensland has the best waterfront views in the area and has been on the market for over two months, with Iain Simms of Henzells Agency running an expressions of interest campaign for its sale. Another at 11a Noonbinna Crescent, Northbridge – just 9km from Sydney CBD – overlooks Sailors Bay with Highland Double Bay agents David Malouf and Harry Schier waiting for the right price.

THE 10 WORST PERFORMING POSTCODES & THEIR SUBURBS:

STATE	POST CODE	LOANS IN ARREARS (%)	SUBURBS
NSW	2170	3.16%	Casula, Casula Mall, Chipping Norton, Hammondville, Liverpool, Liverpool South, Liverpool Westfield, Lurnea, Moorebank, Mount Pritchard, Prestons, Warwick Farm
VIC	3064	2.81%	Craigieburn, Donnybrook, Kalkallo, Michleham and Roxburgh Park.
NSW	2261	2.52%	Bateau Bay, Bay Village, Berkeley Vale, Blue Bay, Chittaway Bay, Chittaway Point, Genning Valley, Killarney Vale, Long Jetty, Magenta, Shelly Beach, The Entrance, The Entrance North, Toowoon Bay and Tumbi Tumbi.
QLD	4211	2.46%	Advancetown, Beechmont, Binna Burra, Carrara, Clagiraba, Gaven, Gilston, Highland Park, Lower Beeechmonth, Mount Nathan, Natural Bridge, Nerang, Nerang DC, Numinbah Valley, Pacific Pines and South Lamington.
VIC	3754	2.40%	Doreen and Mernda
VIC	3023	2.34%	Burnside, Burnside Heights, Cairnlea, Caroline Springs, Deer Park, Deer Park North and Ravenhall.
NSW	2148	2.26%	Arndell Park, Blacktown, Blacktown Westpoint, Huntingwood, Kings Park, Marayong and Prospect.
NSW	2259	2.18%	Alison, Bushells Ridge, Cedar Brush Creek, Chain Valley Bay, Crangan Bay, Dooralong, Durren Durren, Frazer Park, Freemans, Wandalan, Halloran, Hamlyn Terrace, Hilliby, Kanwal, Kiar, Kingfisher Shores, Lake Munmorah, Lemon Tree, Little Jilliby and Mannering Park
WA	6112	2.14%	Armadale, Bedfordale, Brookdale, Forrestdale, Harrisdale, Haynes, Hilbert, Mount Nasura, Mout Richon, Piara Waters, Seville Grove, Wungong and Doobarda.
NSW	2570	2.09%	Belimbla Park, Bickley Vale, Brownlow Hill, Camden, Camden Park, Camden South, Cawdor, Cobbitty, Elderslie, Ellis Lane, Glenmore, Grasmere, Kirkham, Mount Hunter, Nattai, Oakdale, Oran Park, Orangeville, Spring Farm and The Oaks.
Source: S & P Global Ratings

Originally published as Shock RBA warning to hit 100 suburbs on watchlist