The latest APRA figures on loan deferrals were released today:
It's heartening to see some progress here, though 9 per cent is a hugely elevated number, and there's still a long way to go.
Source: APRA
Fitch's Dinkum Index had previously reported 7.4 per cent of borrowers on payment deferrals as at July 2020.
Banks will still likely need to work with thousands of borrowers to help them through after the bulk of mortgage holidays have ended next year, perhaps in the first instance by offering interest-only terms.
This does raise an interesting question about what an 'acceptable' level of mortgage arrears might be from a financial stability perspective.
Western Australia has run mortgage arrears in the 2-3 per cent range for several years, and the world has kept turning.
But since even in the deepest crises most borrowers have kept up their repayments - and because systemic risks tend to arise from what plays out at the margin - one assumes you'd probably want to see arrears with a 2-handle rather than anything more than that.
Yield gap closes
For new borrowers the equation has been shifting quite dramatically this year, as highlighted by property finance expert Tim Boyle.
Housing market investors can now find positive cashflow.
Source: CBA
And with record low mortgage rates the buy versus rent equation has also shifted dramatically as we highlighted here.
More granular information on exactly where it's cheaper to buy than rent can be found in the state by state analysis here.
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There were better numbers for newly confirmed COVID-19 cases Victoria today.
From day to day the numbers bounce around a bit, but the 7-day moving average for new cases fell to a fresh 10-week low, and active cases for Victoria fell by a further 139 to 1,483.
