National home loan delinquencies have improved, with only three states reporting arrears increases, according to the latest data from S&P.
S&P Global Ratings has released its latest RMBS Arrears Statistics, reporting that over 30-day delinquencies across Australia’s residential mortgage portfolio fell from 1.41 per cent in August to 1.36 per cent in September.
Arrears fell in all but three states, with the sharpest decline in Queensland, where delinquencies fell by 8 bps in September.
Conversely, Tasmania reported the sharpest increase in delinquencies, up 7 bps over the same period.
Overall, delinquencies remained highest in Western Australia (2.79 per cent), followed by the Northern Territory (2.69 per cent), Queensland (1.71 per cent), South Australia (1.43 per cent), Victoria (1.26), Tasmania (1.22 per cent), NSW (1.21 per cent) and the ACT (0.98 per cent).
S&P reported that the improvement in national arrears was most pronounced across owner-occupied mortgages, with delinquencies underlying such loans falling to 1.58 per cent in September, down from 1.61 per cent in August.
Meanwhile, arrears underlying investor loans remained unchanged at 1.38 per cent during the month of September.
S&P noted that the divergence in arrears trends across the owner-occupied and investor segments reflected “the different pace in credit growth for the two sectors”, with housing credit growth remaining “relatively stable” for owner-occupiers, while being “more subdued” for investors.
However, S&P also reported that non-conforming mortgage arrears increased in September, rising to 3.89 per cent from 3.47 per cent in August, which it said was most evident in mortgages 31-60 days in arrears.
S&P attributed the increase in delinquencies underlying non-conforming home loans to the effects of softening economic conditions, due to higher portfolio exposure to borrowers of a lower credit quality.