Fitch Ratings says in a new report that a reduction in mining investment and slower mining industry employment has resulted in higher delinquency rates over the past 18 months in areas where a significant population is employed in the industry, compared with delinquencies in non-mining areas.
Only 0.8% of Australian mortgages are located in mining postcodes (defined by Fitch as postcodes in which more than 20% of residents worked in the mining industry – employment based on 2011 census data). As a result, mortgages in Australia performed well overall, thanks to the stable economy, steady unemployment rate and record-low mortgage rates.
While Fitch expects the rapid change in industry dynamics that has occurred in the mining sector to impact both mortgage delinquencies and local property markets, Australian RMBS transactions are typically well-diversified geographically. As a result, Fitch does not expect the fall in mining employment to have a material effect on securitised portfolios and does not expect it to affect RMBS ratings in the medium term.
