Mortgage delinquencies mount as more borrowers find their home is worth less than their loan

PHOTO: Falling prices mean homeowners are increasingly seeing the balance on their loans exceeding the value of the property. ABC News: Alistair Kroie

Buried deep in the ANZ’s first-half results was a pretty disturbing story of just what is happening in the property market.

Key points:

ANZ says mortgage delinquencies are rising as households are “doing it tough” with low wage growth
Falling house prices are exacerbating the problem, leading to borrowers owing more than their house is worth
There is evidence banks are losing patience and forced selling of houses may pick up, hitting both the owner and the bank

“We saw 500 or 600 families in this half get themselves into difficulties in terms of not being able to keep up with their payments,” ANZ boss Shayne Elliott observed.

“That’s a lot higher than we’ve seen in the past. So the question is, is this a trend? Is this a blip?”

Looking at ANZ’s 90-plus day mortgage delinquencies chart, it certainly looks like a trend, not a blip.

Over the past four years, in virtually every state and territory, delinquencies have stepped up sequentially each year.