Home loan arrears on the rise
The number of Australians behind on their home loans has risen 25%.
S&P Global Ratings has found the proportion of home loans more than 30 days in arrears rose in the third quarter by 25% compared to the same period last year, Investor Daily has reported. The proportion of arrears still sits at a low level of 1.14%, the agency said, below its peak of 1.69% and the 10-year average of 1.25%. While arrears were up on a year-on-year basis, they fell from 1.19% the previous quarter.
S&P blamed the rise in arrears on low wage growth and high household debt, the Investor Daily said. The ratings agency also said declining growth in full-time employment was pushing some borrowers into part-time employment.
Western Australia had the highest arrears, at 2.03%. South Australia followed at 1.55%, and the Northern Territory also had higher arrears at 1.48%.
Seven of the country’s 10 worst-performing postcodes for arrears were in Queensland, Investor Daily said. This was up from five of the state’s postcodes in the second quarter.
S&P predicted that arrears would decline over the quarter before beginning to rise again as Christmas approaches. The agency said that low interest rates and relatively stable unemployment levels mean most borrowers would “stay on top of their mortgage repayments”.