According to S&P Global Ratings research agency, at this same time last year the percentage of Australian mortgages in arrears has increased by 19 per cent year-on-year, up from 1.14 per cent in the prior corresponding period.
S&P stated that these arrears levels remain “well below” the historical peak of 1.69 per cent, and this increase is in line with its expectation of a cyclical rise toward the end of each year. Interestingly, Sub-Prime loans more than 30 days in arrears increased to 4.43 per cent from 4.36 per cent in the previos quarter but were down from 4.63 overall which is much better than their post-GFC high of 17.09 per cent!
The S&P Agency stated that the reason for the lower arrears in the sub-prime sector is because there was an improved standard of lending criteria and improved quality of properties that secured these sub-prime loans.
Eight of the nation’s top 10 postcodes with the highest per-centage of home loans in arrears were in Queensland and Western Australia. During the last quarter of 2016 mortgage arrears in Western Australia climbed to a staggering 40 per cent year-on-year to 2.10 per cent. The reason for this is due to the slow down in mining investment and mining jobs which has had a flow-on effect to the local economies.
Property prices in Victoria and NSW have continued to increase strongly and home loan arrears remain quite low.
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