South-east worst hit by bankruptcy

Melbourne’s south-east has the highest tally of bankruptcies in Victoria,  according to  figures that have for the first time provided a breakdown of  where financial stress is greatest in the state.

More than 180  bankruptcies took place in the postcodes that cover Cranbourne and Frankston  over the 12 months to June 30, 2011. The 3977 postcode, which includes  Cranbourne, Cranbourne West and Cranbourne South, had 98 bankruptcies while the  3119 postcode, which covers Frankston, had 87.

Demographer Matthew  Deacon, of id Consulting, said Cranbourne’s bankruptcies were probably high in  part because of strong population growth and the high rate of new mortgages in  the area.

He said mortgage stress was associated with high-growth areas  in part because mortgagors were more likely to default early in the life of  their loan. He said the area covered by 3977 had grown from about 43,000 people  in 2006 to about 75,000 today.

Bankruptcies were relatively high in other  areas of high population growth, such as Point Cook and  Craigieburn.

However, Mr Deacon said the number of bankruptcies in the  Frankston area was surprising, as it was not an area of high population growth. ‘‘You could say that 3977 (the region including Cranbourne) has exploded, while  Frankston has done almost nothing,’’ he said.

The postcode with the  third-highest count covers the area north from Hoppers Crossing to Caroline  Springs. That area had 67 bankruptcies, equating to a leap of nearly 30 per cent  between that area and second-placed Frankston.

The median number of  bankruptcies for postcodes statewide was eight.  Taking population into  account, the south-east remained a notable hub of financial stress.

The  3975 postcode, which borders Cranbourne to the north, had 16 bankruptcies out of  an estimated 2011 population of fewer than 3000.

Comparable rates could only be  found in rural areas, with populations so small that two or three bankruptcies  could make a statistically significant impact.

Leanne Petrides, manager  of the Cranbourne Information and Support Service, said she was not surprised at  so many bankruptcies in the region.

‘‘This is an area of high  socio-economic disadvantage,’’ Ms Petrides said. ‘‘We’ve got massive  growth  and there is not necessarily the infrastructure [to support the  growth].’’

Ms Petrides said many of the people who sought help through  her agency were casual workers who could find themselves out of work suddenly.

‘‘They are the first to go and they are left with very high debts they  cannot reach,’’ she said. The bankruptcy data, provided by the   Insolvency and Trustee Service Australia, has only previously been disclosed on  a state-by-state basis.