Mortgage in Australia

According to Standard and Poor’s (S&P) latest RMBS Arrears Statistics report, the number of Aussies who’ve fallen behind on their home loan repayments has dropped. Delinquent housing loans in Australian prime residential mortgage-backed securities (RMBS) decreased to just 1.00 percent last November from 1.04 percent in October.

S&P said home loans that were thirty days past due fell in all states and territories in November. This was led by Western Australia, which recorded a 0.12 percentage point decline to two percent. Aside from this, delinquent home loans in Victoria and New South Wales also registered declines, contributing to the fall in the national reading.

According to Your Mortgage, S & P said, “More than 54 percent of the RMBS portfolio balance is exposed to New South Wales and Victoria combined, and arrears levels in the two states have declined to the lowest level in two years. Arrears fell to 0.74 percent in New South Wales and 0.90 percent in Victoria. The Australian Capital Territory continued to record the nation’s lowest arrears level, at 0.56 percent.”

Moreover, 0.88 percent in Tasmania, 1.17 percent in South Australia, arrears fell to 1.35 percent in Queensland and 1.50 percent in the Northern Territory. S&P said arrears “typically remain relatively stable in the last few months of the year, before a cyclical increase in the first quarter due to higher consumer spending during the seasonal holidays.”

Still, S&P does not expect it to mark the start of an extended uptrend in arrears as the spike in arrears may occur in the coming months. Those who have overspent during the holiday season may struggle to keep up with loan repayments.

“We do not expect arrears to increase much above present levels for as long as the current, relatively benign economic conditions continue but stable and improving employment conditions and low-interest rates may continue,” S & P explained.

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