PHOTO: Mortgage stress is expected to rise as more Australians lose their jobs. Alistair Kroie.
As job losses continue to rise because of shutdowns in place to fight the coronavirus crisis, the number of Australians struggling to repay their mortgages is expected to lift to higher levels than seen during the global financial crisis.
Key points:
- Australia avoided mass defaults during the GFC but one analyst says that may not be the case this time
- A NAB economist says the unemployment rate will leap to 12 per cent, despite stimulus measures
- Another analyst predicts 1.5 million Australians could soon be in mortgage stress and some will default on loans
Credit rating agency S&P Global has warned the number of Australians falling behind on their mortgage repayments is likely to soar.
“We currently expect increases in arrears to be higher than during the 2008 global financial crisis, given the wide-ranging effects on the economy stemming from the sudden disruption to economic activity,” S&P analyst Erin Kitson said.
“Arrears will also rise much sooner than they did during the financial crisis.”
Australia avoided mass defaults during the GFC, with mortgage arrears rising to 1.69 per cent after the 2008 crisis, from a pre-crisis average of about 1.40 per cent.
READ MORE VIA ABC