Home' Sunraysia Daily : property15072017 Contents Pr pertyGuide 23
Saturday, July 15, 2017
Interest rate rises have started
to bite, with more Aussies
falling behind on their mortgage
The number of home owners more than 30 days
behind on their repayments grew from 1.16 per cent
March to 1.21 per cent in April, according to S&P
“Part of the increase reflects a decline in outstanding
loan balances, but we believe interest-rate rises
announced by different lenders during the past few
months affected the Standard & Poor’s Performance
Index (SPIN) for Australian prime mortgages, given
that most of the loans are variable-rate mortgages,” the
ratings agency said.
Lenders have recently lifted rates for interest-
only loans to comply with an Australian Prudential
Regulation Authority’s directive in March that banks
must limit higher risk interest-only loans to 30 per cent
of new residential mortgages.
Queensland recorded the greatest growth in home
owners more than 30 days behind on their mortgage
repayments, with arrears lifting to 1.66 per cent in
April, compared with 1.58 per cent a month earlier.
NSW had the next largest increase, where arrears
rose to 0.91 per cent, from 0.85 per cent.
The S&P report looks only at loans in
Australian residential mortgage-backed securities
transactions, which account for about five per cent
of all outstanding home loans, but are considered
representative of the broader market.
Meanwhile, property prices have inched slightly
higher across most of the major capital cities, although
the auction clearance rate remains below 70 per cent,
according to property analytics firm, CoreLogic.
Home values across Sydney, Melbourne, Brisbane,
Adelaide and Perth rose by an average of 0.6 per cent
for the week to June 18, were 0.6 per cent higher than
a month ago.
Sydney’s average price movement has resumed
its positive trend, lifting 0.9 per cent last week, after
slipping 0.2 per cent the previous week and being flat
the week before that.
Melbourne also improved last week, by 0.7 per cent,
while Brisbane and Adelaide both recorded just a 0.1
per cent increase, and Perth was flat.
On the auction front, there were 2,407 properties
across the five major capital cities that went under the
hammer last week, with a preliminary clearance rate of
69.6 per cent. It marked the third consecutive week the
combined clearance rate remained below 70 per cent.
Melissa Jenkins, AAP
Interest rate rises drive mortgage arrears
A continuing slide in the number
of hours people are working
and ongoing worries about
household debt convinced
Australia’s central bank that
the official interest rate should
remain unchanged at its last
Glimmers of hope in some areas of employment,
better business conditions and evidence that a
regulatory crackdown on investor lending is starting to
bite encouraged the Reserve Bank of Australia board’s
view of the nation’s economic wellbeing, minutes
from its June meeting show.
However a fall in the total number of hours worked,
persistently weak wages growth and a hugely varied
housing market — characterised by strong east coast
capital city prices and softness elsewhere - were cited
as key factors that led the RBA to leave the cash rate
unchanged at 1.5 per cent.
The RBA board noted that a 0.5 per cent increase
in wages in the March quarter suggested wage
growth had “stabilised” at low levels, but remained
particularly low in the mining sector.
“While wage growth is likely to remain subdued
for some time yet, there had been isolated reports of
localised and skills-specific labour shortages feeding
into higher wages,” the minutes said.
“Although employment growth had been stronger
in recent months, growth in total hours worked had
While various forward-looking indicators pointed to
continued growth in employment, the bank said wage
growth remained low “and this was likely to remain
the case for some time yet.”
Economists at Citi said the minutes pre-dated a
suprise fall in the May unemployment rate to 5.5
per cent, but the drop was unlikely to have eased the
NAB economist Tapas Strickland said the minutes
signalled more optimism about the state of the
economy than the central bank had shown in its post-
decision statement on June 6, although wages growth
remained a point of concern.
“Tuesday’s minutes add to the further positive
shift in the RBA’s assessment of the economy,” Mr
“The recent strength in the labour market appears to
have alleviated the RBA’s concerns for now, though
they are concerned about elevated underemployment
and weak growth in hours.”
Attention will now shift to when the RBA will start
lifting rates, he said, as other central banks around the
world show signs of preparing to hike their cash rate.
Peter Trute, AAP
Jobs, housing still a worry for RBA
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