It’s as good as it gets right now for mortgage arrears, from Fitch:
Record Low Arrears: The Dinkum Index fell 18bp to 0.91% in 3Q15, the lowest in a decade, from 1.09% the previous quarter, as house prices rose; other key factors that enhanced 3Q15 mortgage performance included the stable unemployment rate (6.1%), low cash rate (2%), low standard variable rate (5.45%), and low CPI (1.5% yoy).
New Origination Magnifies Improvements: Two-thirds of the drop was due to the inclusion of new transactions six months after closing. These deals constituted 16.3% of the index and had WA arrears of 0.33%. The Dinkum would have fallen 6bp, still reaching the lowest level in a decade, even after removing the impact of these deals.
Losses Good as It Gets: The 12-month annualised loss rate was unchanged qoq at an extremely low 0.02% helped by capital city house price growth of 11% yoy to 3Q15.
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David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
Record Low Arrears: The Dinkum Index fell 18bp to 0.91% in 3Q15, the lowest in a decade, from 1.09% the previous quarter, as house prices rose; other key factors that enhanced 3Q15 mortgage performance included the stable unemployment rate (6.1%), low cash rate (2%), low standard variable rate (5.45%), and low CPI (1.5% yoy).
