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Home loan arrears on the rise

Staff Reporter 1 minute read

Australian delinquencies reached record highs in the fourth quarter of 2008, two reports revealed this week.

Moody’s Investors Service said yesterday that delinquencies of greater than 30 days reached a high of 1.58 per cent in the December quarter.

Research released by Standard & Poor’s yesterday also showed arrears on prime RMBS home loans rose to a new high of 1.76 per cent during the same period.

While these figures represent a small fraction of total home loans Standard & Poor’s warned that arrears were likely to increase off the back of the deteriorating economic conditions.

“There is no doubt that the 4 per cent cut in the official cash rate since September 2008, and reduction in living costs and expenses, should help ease the financial pressures experienced by some households,” said Standard & Poor’s credit analyst Vera Chaplin.

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“Nevertheless as economic conditions continue to deteriorate this is likely to be more than offset by the impact of potential job losses and/or significant reduction in household disposable income.”


Home loan arrears on the rise
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