Many authorised deposit-taking institutions (ADIs) have granted temporary relief to borrowers impacted by COVID-19, allowing them to defer loan repayments for a period of time. To provide greater transparency of loan repayment deferrals at the industry level, APRA is publishing the aggregated data obtained from all ADIs in Australia, excluding foreign branches.
*the number of facilities does not necessarily indicate the number of borrowers as individual facilities with more than one repayment type may be reported more than once.
**to give an indicator of potential elevated risk in loans subject to deferral this chart compares loans subject to deferral to total loans across three key cohorts – loan to value ratio of greater than 90 per cent, investor loans and interest only loans.
An accessible version of the dashboard, with data labels, is available here.
Additional commentary
Deferred loans
Total loans
Deferred loans, share of total loans
Total
$274 billion
$2.7 trillion
10%
Housing
$195 billion
$1.8 trillion
11%
Small business
$55 billion
$321 billion
17%
As at 30 June, data submitted by all ADIs indicates that $274 billion worth of loans have been granted temporary repayment deferrals, which is close to 10 per cent of total loans outstanding. Housing loans make up the majority of total loans granted repayment deferrals, although small business loans have a higher incidence of repayment deferral with 17 per cent of small business loans subject to repayment deferral, compared with 11 per cent of housing loans.
Overall the composition of loan repayment deferrals remains relatively stable with the most noticeable change being increased loans exiting from repayment deferral, from $2 billion in May to $18 billion in June. The majority of these loans have returned to a performing status. The housing risk profile shows that housing loans granted repayment deferrals are more likely to be extended to owner-occupier borrowers, subject to principal and interest repayments, and have higher loan to value ratios than all housing loans.
The temporary repayment deferral programs were implemented within tight timeframes and the data has been submitted to APRA on a best endeavours basis. As ADIs improve their ability to capture these data items, resubmissions are expected. APRA will continue to publish this aggregate information on a monthly basis until loans subject to repayment deferrals are no longer a notable component of the ADI industry’s total loan portfolio.
Specufestors in distress keeps climbing, now at 36% of the total. The percentages don’t tally with APRA’s total number of mortgages. There are 2m specufestors in Australia. 1.3m of those are negatively geared suggesting leverage. How do we get 36% of specufestors in deferral but only 450m mortgages as the total for all?
Whatevs! It’s a gigantic number and one can only wonder how long it is before they cut and run as they pay the property a negative carry only to watch capital decline while:
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.
