the adviser logo

NSW drives national rise in mortgage arrears

by Reporter4 minute read
Arrow up

Delinquencies increased in October across every state except Tasmania, with the largest rise reported in NSW, the latest S&P data has revealed.

According to Standard & Poor’s latest arrears statistics, delinquencies over 30 days underlying Australia’s prime residential mortgages increased in October, rising from 1.33 per cent in September to 1.35 per cent.

To continue reading the rest of this article, create a free account
Already have an account? Sign in

The data revealed that arrears rose in every state except Tasmania, where they dropped from 1.26 per cent to 1.14 per cent.

The sharpest arrears jump was in NSW, where delinquencies increased from 1.04 per cent to 1.12 per cent.


The state with the highest underlying arrears figure was Western Australia (2.58 per cent), followed by the Northern Territory (2.38 per cent), Queensland (1.67), South Australia (1.42 per cent), Victoria (1.22 per cent), Tasmania (1.14 per cent), NSW (1.12 per cent), and the ACT (0.87 per cent).  

S&P also reported that when broken down, arrears on both owner-occupied and investor loans increased, with owner-occupied arrears rising from 1.52 per cent to 1.54 per cent, while investor loan arrears increased from 1.19 per cent to 1.25 per cent.

The ratings agency attributed the sharper increase in investor loan arrears (0.06 per cent) to the repricing of investor and interest-only loans.

Moreover, S&P reported that regional banks, followed by non-banks and major banks recorded the largest increases in arrears during October, but noted that movements in percentage terms can “mask or inflate” underlying trends when assessed in isolation.

The ratings agency made reference to the higher arrears rates among regional banks since the GFC, as a result of their higher exposure to regional arrears, which have been affected by drought and the downturn in the mining sector.

S&P also observed that despite relatively higher arrears among non-bank mortgages in the prime sector have continued to trend downward.

S&P concluded that while national arrears are “elevated”, they “remain low overall”, adding that the delinquency rate is “unlikely to rise much further above current levels”, citing positive employment conditions and the “strong” collateral quality of most portfolios.

[Related: Arrears drop by still ‘noticeably’ high]

NSW drives national rise in mortgage arrears
arrowup businessman ta
TheAdviser logo
arrowup businessman ta


You need to be a member to post comments. Register for free today


Anja Pannek CEO PLAN

Anja Pannek named MFAA CEO

The board of the Mortgage & Finance Association of Australia (MFAA) has confirmed that Anja Pannek will be the...

mike felton mfaa ta jdayl5

Aggregator heads reflect on Mike Felton’s legacy

Following on the news that Mike Felton is to retire next month and step down as chief executive of the Mortgage &...

melanie kiely afg ta mzh8zm

AFG non-executive director steps down from board

Australian Finance Group Ltd (AFG) has advised that Melanie Kiely will be stepping down from the AFG board to...

Read the latest issue of The Adviser magazine!
The Adviser is the number one magazine for Australia's finance and mortgage brokers. The publications delivers news, analysis, business intelligence, sales and marketing strategies, research and key target reports to an audience of professional mortgage and finance brokers
Read more