Mortgage stress near record low in mid-2021

Original article by Roy Morgan
Market Research Update – Page: Online : 21-Jul-21

New research from Roy Morgan shows that an estimated 677,000 mortgage holders (17.3%) were at risk of ‘mortgage stress’ in the three months to May 2021. This period encompassed the end of the JobKeeper wage subsidy in late March, low community transmission of COVID-19 and only a few ‘short and sharp’ lockdowns and border closures to deal with outbreaks. This level of mortgage stress is down sharply on a year ago when an estimated 794,000 mortgage holders (19.4%) were at risk during the early stages of the COVID-19 pandemic in the three months to May 2020. Of those mortgage holders considered ‘At Risk’ in the three months to May 2021, some 440,000 (11.8% of all mortgage holders), were considered ‘Extremely at Risk’, down from 480,000 (12.3%) on the three months to May 2020. These are the latest findings from Roy Morgan’s Single Source Survey, based on in-depth interviews conducted with over 50,000 Australians each year including over 10,000 owner-occupied mortgage-holders.

CORPORATES
ROY MORGAN LIMITED

Solo buyers a growing force in the housing market

Original article by Nila Sweeney
The Australian Financial Review – Page: Online : 24-Jun-21

Solo first home buyers accounted for 38 per cent of ME Bank’s home loan applications in 2020, up three per cent on the previous year. Single women accounted for 49 per cent of all solo home loan applications, down one per cent on the previous year. ME Bank also reported that single men made their first home loan application at the average of 32 in 2020, down from an average age of 35 in 2018. Single woman took out their first home loan application at the average age of 34 in 2020, also down from an average age of 35 in 2018.

CORPORATES
ME BANK

Mortgage and rental stress worsen in May

Original article by Nila Sweeney
The Australian Financial Review – Page: 40 : 9-Jun-21

Data from Digital Finance Analytics shows that 41.3 per cent of households in New South Wales were in mortgage distress in May, compared with just 38.2 per cent in April. Likewise, 56.8 per cent of households in Tasmania were in mortgage distress. The northwest Sydney suburb of Stanhope Gardens had the nation’s highest level of mortgage stress in May, at 91.5 per cent. Meanwhile, the Northern Territory was the only jurisdiction that did not record an increase in rental stress during the month.

CORPORATES
DIGITAL FINANCE ANALYTICS

Loan deferral scheme a win for economy

Original article by James Frost
The Australian Financial Review – Page: 19 : 28-Apr-21

More than 468,000 home loan customers in Australia were on deferred repayment plans at the height of the COVID-19 pandemic; this had fallen to 3,170 by the end of March. Likewise, the number of small business borrowers who have deferred their loan repayments has fallen from 235,440 to just 508. Overall, just 0.5 per cent of all loans are still on a ‘repayment holiday’. The loan deferral scheme ended on 31 March, but Australian Banking Association CEO Anna Bligh says the nation’s banks will continue to provide support for distressed households and businesses.

CORPORATES
AUSTRALIAN BANKING ASSOCIATION

Banks defiant on mortgage rates

Original article by Joyce Moullakis, Lachlan Moffet Gray
The Australian – Page: 17 & 21 : 5-Nov-20

Australia’s four largest banks will keep their variable home loan interest rates unchanged, despite the Reserve Bank’s decision to reduce the cash rate to a record low of 0.1 per cent. However, the "big four" banks will all reduce their fixed home loan interest rates, with some falling below two per cent for the first time. The majority of mortgage loans across the Australian financial sector have variable rates, although more borrowers are opting for fixed-rate loans in the low-interest rate environment.

CORPORATES
RESERVE BANK OF AUSTRALIA, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Valuer Acumentis predicts rise in distressed sales

Original article by Michael Bleby
The Australian Financial Review – Page: 32 : 30-Oct-20

Listed valuation firm Acumentis has reported revenue of $13.4 million for the September quarter, compared with just $8.4 million for the entire 2019-20 financial year. The firm has posted a pre-tax profit of $1.6 million for the quarter. Acumentis notes that it is benefiting from an improvement in residential activity, while it predicts an increase in forced home sales as JobKeeper payments and mortgage repayment deferral periods end.

CORPORATES
ACUMENTIS GROUP LIMITED – ASX ACU

Give more help to borrowers: APRA

Original article by Cliona O’Dowd
The Australian – Page: 17 : 23-Sep-20

Repayments on more than 900,000 mortgage and business loans were deferred in late March due to the coronavirus pandemic. Many borrowers are now facing the six-month anniversary of their deferral, and the Australian Prudential Regulation Authority has offered lenders a number of suggestions about how to handle customers who are slated to resume repayments. Amongst other things, APRA has suggested that lenders should contact borrowers via a number of channels in the lead-up to the expiry of their deferral period. National Australia Bank CEO Ross McEwan recently indicated that 20 per cent of these customers have failed to respond when it has contacted them regarding the issue.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Lockdown to trigger more loan distress

Original article by Cliona O’Dowd
The Australian – Page: 13 & 20 : 10-Jul-20

Data from the Australian Prudential Regulation Authority shows that banks have deferred 18 per cent of small business loans in response to the coronavirus pandemic. Morgan Stanley has warned that that many businesses in Melbourne that have been forced to shut down for a second time may never re-open, particularly smaller ones. The APRA figures also show that more than 10 per cent of home loan repayments have been put on hold. Loans to investors account for 34 per cent of home loan repayments that have been deferred, prompting concern that there may be a surge in distressed selling.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, MORGAN STANLEY AUSTRALIA LIMITED

CBA bid to avoid cliff for economy

Original article by Joyce Moullakis
The Australian – Page: 13 & 14 : 22-Jun-20

The Commonwealth Bank of Australia estimates that about 127,000 of its customers with mortgage loans have deferred their repayments due to the coronavirus pandemic. Angus Sullivan, the head of CBA’s retail banking division, says that 15-20 of these customers are still making some repayments, while some customers have asked to resume making repayments. He adds that CBA has begun contacting all customers who have deferred their repayments to discuss their options ahead of the deferral arrangement ending in September.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Bad loans hit small banks hard: Citi

Original article by Cliona O’Dowd
The Australian – Page: 16 : 16-Jun-20

Citigroup analysts note that Australia’s smaller mortgage lenders have actively pursued increased market share in recent years. However, Citi warns that they are set to be hardest hit by a coronavirus-induced rise in loan losses later in 2020, as such losses tend to be highest during the first 3-4 years of a loan. Citi contends that small lenders will need to focus on capital demands rather than further growing their market share, which in turn is likely to prompt a swing back to large lenders.

CORPORATES
CITIGROUP PTY LTD