Australians hit mortgage trouble
Mortgage arrears have unexpectedly increased in Australia, according to new data released by Fitch Ratings.
In a new report issued this week, Fitch said arrears had unexpectedly increased as more borrowers who were one or two months in arrears had been unable to cure their delinquent status through the last quarter of 2010.
It said the increase was unexpected because preliminary November data had been in line with the previous quarter, and there had been no specific event that could have been expected to affect mortgage performance.
The Fitch analysis said Australian mortgage performance was expected to worsen in the current quarter, mainly driven by the usual impact of Christmas spending and holidays.
As well, Fitch Ratings structured finance team director James Zanesi said the Reserve Bank of Australia’s November interest rate rise and the Queensland floods were also likely have affected the data.
The ratings agency said it did not foresee any major issues in the Australian prime mortgage market, because employment serviceability and house price levels were satisfactory and the Australian economy remained strong.
AUTHOR
Mike Taylor
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