Home Loan arrears still a problem
Home Loan arrears are expected to stay at the presently high levels in the immediate future.
According to Fitch Ratings, home owners who are 30 or more days behind on their mortgage payments will will remain at approximately 1.75 per cent for the rest of the year.
This forecast is based on recent estimates issued by the RBA that rates are likely to remain at current levels for the next few months.
In the minutes of its July meeting, the Reserve Bank warned that mortgage arrears rates had gone up among home buyers who had purchased their homes during the property price peak periods, particularly in Western Australia and Queensland.
RBA believes that home loan arrears are the fault of lenders who did not follow sufficiently strict lending guidelines.
Fitch associate director James Zanesi said higher interest rates had put home buyers in difficulty.
Of course the recent spate of natural disasters has had an unexpected financial impact on many Queensland and Victorian families.
“ While Fitch does not believe that natural disasters such as the December/January floods have been the main factor in the rise in delinquency rates in Queensland, the ratings agency cannot exclude that natural disasters might have indirectly contributed in terms of regional unemployment and increasing cost of living,” he said.
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