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Fitch (in brief):
- Australian mortgage arrears are at their highest level since May 2020 when arrears spiked due to the beginning of the Covid-19 pandemic
- 30+ day mortgage arrears rose by 10bp qoq to 1.21% in 4Q23, continuing the increase from December 2022 when arrears were at their lowest since 2002
- Early-stage arrears increased by 6bp to 0.45%, the highest 30-50 day arrears rate seen since February 2016
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Historically, arrears increase in the fourth quarter, but this increase is larger than in prior years. Therefore, the rise most likely indicates that persistent inflation and the 4.25pp increase in official interest rates since May 2022 are having an impact on some borrowers.
This article was written by Eamonn Sheridan at www.forexlive.com.
