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Thursday, 5 July 2018

Mortgage arrears decline again

Arrears well down from 2017

Short and sharp and sticking strictly to the facts today.

S&P Global reported Prime SPIN 30+ day mortgage arrears at just 1.08 per cent.

That's well down from 1.21 per cent a year earlier, with Western Australia, the Northern Territory, and some parts of regional Queensland the only delinquency hotspots of any note. 

And it's certainly a long way below the 2011 and 2012 peaks at 1.6 per cent, when mortgage rates were considerably higher. 

This is broadly consistent with the HILDA surveys and analysis released by the Reserve Bank of Australia, which found that mortgage stress is not particularly high at the present time (while the labour market continues to improve steadily). 

It's also worth noting here that 90+ day Prime SPIN mortgage arrears of just 0.49 per cent were well down from 0.65 per cent a year earlier. 

As for those so-termed 'dodgy' non-confirming loans, arrears continued to plunge from 4.19 per cent in March 2018 to only 3.86 per cent in April 2018. 

That's the lowest level of non-confirming arrears across two decades of data. 

If I was to highlight one area of weakness, it would be the increase in 90+ day delinquencies on the books of the major banks.

But even here the increase was only to 0.65 per cent.