PHOTO: Australia’s mortgage arrears have climbed back toward 2010 levels, but remain short of posing a threat to the financial system or households, a senior Reserve Bank Official said.
(Bloomberg) — Australia’s mortgage arrears have climbed back toward 2010 levels, but remain short of posing a threat to the financial system or households, a senior Reserve Bank Official said.
The number of borrowers falling behind in their mortgage repayments is still well beneath the levels reached in the early 1990s recession, as well as those in a number of other developed nations, said Jonathan Kearns, head of financial stability at the RBA.
“Housing arrears have risen, but by no means to a level that poses a risk to financial stability,” Kearns said in a speech to a property summit in Canberra Tuesday. “Weak income growth, housing price falls and rising unemployment in some areas have all contributed.”
Kearns said arrears could edge higher “for a bit longer” as some of those economic drivers mightn’t reverse in the near-term. Around 1% of household loans, which also include credit card and personal debt, are more than 90 days overdue, according to RBA data.
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