The mortgage cliff was a mirage

At the height of the coronavirus pandemic last year, 11% of Australian mortgages were on a deferred payment plan, numbering 488,249 mortgages at the peak in May 2020:

At the peak of the pandemic, 11% of mortgages were on a deferred payment plan.

Since then, the number of mortgage deferrals has gradually shrunk to the point that there are now only a few thousand mortgage holders remaining on deferred payment plans.

According to new data from the Australian Bankers Association (ABA), published in the ABC, there were only 3,170 mortgages on deferral at the end of March. Thus, only 0.7% of the mortgages originally deferred remained on repayment holidays when the program officially ended last month, with the value of deferred mortgages only 0.07% of the banks’ total mortgage portfolios.

ABA chief Anna Bligh has hailed the result, noting the “figures reflect the impressive recovery Australia’s economy is experiencing after facing a one-in-100-year pandemic”.

This time last year, we were concerned that the ‘mortgage cliff’ towering over the housing market would send prices tumbling once emergency income support was withdrawn.

The economy’s and housing market’s rapid recovery proved this prediction dead wrong.

Unconventional Economist


  1. The real mirage is what they are leaving you to believe now

    they are hiding the truth

    Don’t fall for it

    The problems are being hidden

    You’ll see over the next 12 months

    • The data presented above is conveniently till the end of March – most of the people who went into mortgage stress were either immediately relieved by Job Keeper and many subsequently moved onto the supplement which banks renegotiated to include.

      How many will return to mortgage stress once job keeper ends – there were 1.5 Million people on Job Keeper in February with 600,000 in Melbourne alone.

      How does that Data square MB ?

      Yeah…..thought so.

      • I agree

        CPI is another propaganda concocted by government ….along with ABS unemployment

        Let’s see what crock of shxt they come up with today when prices of everything have gone through the roof

  2. Goldstandard1MEMBER

    This is the mirage… the notion that everything is fine and we got through the worst of it……leveraging into this is a bad call.

    • I honestly don’t think I have been without sympathy, and actively vindictive towards people during this 20+ year boom. Even Nathan Birch had my sympathies as a symptom of greater evil.

      But those who have leveraged and capitalized over the incredible suffering people have endured and cheated the system on the support measures of the government during covid have my active rage.

      Anyone who goes down – and I think most will – who have bought during this period can rot in hell.

      I have nothing but contempt.

      The level of unadulterated and outright propaganda being spread by property spruikers is beyond belief, it is war time levels of outright state sanctioned propaganda.

      Burn – and you will.

      There is no chance at all Australia will survive this year without an epic re-adjustment the numbers are just so far off crazy.

      Massive levels of unemployment, massive levels of debt, an economy almost completely reliant on a single commodity bought from a single buyer, with the entire domestic market being held together with a Trillion once in a hundred year stimulus so large it will bankrupt generations.

      Mind boggles at the level of delusion people are engaging in – a total and complete mental break down of the most basic fundamentals of economic principals.

      This website along with the entire economic commentary on a global scale simply switched paradigms mid stride and decided MMT theory was not just feasible, but totally sound, reliable and in fact a concrete course of action so perfect it was unnassailable.

      The issue is that if there is anything wrong with MMT – we are totally doomed – it is the perfect analogy of the “Ship Of Fools”, “The Titanic” – we all got on board because nothing could go wrong – but if one thing does go wrong – there is no escape, no possible solution, it must sink.

      At so it is coming to pass.


        Well put RH!
        The deafening roar of the falls ahead can be heard and felt viscerally now and the current in the river is definately quickening. What just moments ago was adrenalin, is now raw fear as our logical brain cannot be tricked any longer. The ‘threats’ have become reality and are inescapable now.

        The vertical walls of the canyon on both sides will permit no escape and over we will go. Catastrophe awaits; patient as always to provide a lesson for fools.
        Had we listened to the ‘old-timers’ about paddling this strecth of the river, this could have been avoided but our arrogance, greed and ego prevailed.
        We will rightly be punished and injured (or worse) and it will be us warning those that follow to never again do what we have done.

  3. TheLambKingMEMBER

    The economy’s and housing market’s rapid recovery proved this prediction dead wrong.

    The predictions were right until the LNP put in Jobkeeper and Jobseeker – which saved the economy (along with the State Premiers keeping Covid out.) I am ‘anti’ anything right wing – but this was good policy (but also with plenty of implementation issues.)


      Oh and the 36 Billions (thats nine zeros!) Super withrdrawls much of which (30%ish) went to housing repayments/costs!

      • Jumping jack flash

        Leveraged at 95% LVR.
        I’d say it pretty much explained the entire “boom”.
        ‘Twas no boom.
        It was essentially a FHB grant for everybody. And look at it go!

        If nothing else, and there wasn’t much else, it pointed to the immense amount of pent up demand from people who are essentially locked out of the ponzi due to the buy-in.

        Bernie is spinning in his grave. Bless his soul.

      • “Oh and the 36 Billions (thats nine zeros!) Super withrdrawls much of which (30%ish) went to housing repayments/costs!”
        Every red cent of it plus a mega dose of borrowed leverage all tacked neatly onto the price of every house sold. Not one cents worth of real economic investment or productivity gain achieved. Imagine if that had gone into green energy and agricultural science and mechanisation instead of house prices and plane loads of crop pickers, or whatever other dumb 18th century industrial processes we cling onto for the benefit of our masters pockets.

  4. I’d say the ‘repayment cliffs’ was the easiest probability weighted trade throughout that COVID period. Said it here multiple times, was not going to happen. Even outside of the large job seeker/keeper programs, co-ordinated action by Australian banks to force default across hundreds of thousands of borrowers…… seriously? I believe most of the majors also indicated that ‘repayment cliffs’ aside, they were placing at least a year long a moratorium on almost all foreclosure activity. Just sensible credit and balance sheet policy in the circumstances, again, before you take what was highly likely govt stimulus into account.

    Yet another little truism that cost the comment section uber bears dearly (that is if they were running any actual money of course).

  5. Many of these people on mortgage stress, without a way out would have sold at the enforcement of their lenders. Wages have not changed but prices have gone up with a binge on cheap debt, government handouts and super raids as pointed out above. These have all stopped now so how long until the kitty runs dry again and people are back like Oliver Twist saying “please sir, can I have some more”?

    • working class hamMEMBER

      I believed it was the end, transferred my house deposit into a private vault, (should have bought gold!) and waited for banks to collapse. What I saw was the complete up ending of reality, all logic was removed and the rules of law altered to assist over leveraged morons from feeling any pain.
      The system is completely fraudulent, the narrative of prosperity is all that matters, the game will simply adjust to what ever level of risk arises by increasingly reckless policies.
      This isn’t the financial system we want, but the one we deserve. Only in Australia can you buy a car cheaper brand new than second hand, a 10 year old dishwasher that doesn’t function for $400, a diff with broken gears for $200 and RE gains be more profitable than most careers.

      • Yes digusting isn’t it; reward greed and punish savers and prudent decision-makers.

        Chase every last penny off the poor through robodebt, but when questioned if businesses who made a fortune and also received Jobkeeper would have to pay some back; well…apparently that is just the politics of envy. It disgusts me that my taxes and my child’s future taxes have gone down the greedy gullets of millionaires/billionaires and to bail out irresponsible aspirationals who greedily hoover up property beyond their means, while making it impossible for the average working FHB without mummy and daddy’s purse to buy a house at all.

        What should I have expected though from a society built by criminals and cut throats. I hope the whole thing goes up in flames. I know I will not be alone in enjoying the headlines. Might throw a party Martin Place!

        • Jumping jack flash

          “…but when questioned if businesses who made a fortune and also received Jobkeeper would have to pay some back…”

          This was the sign of a colossal failure and probably why they failed to reset the New Economy.

          Businesses were meant to pass the Jobkeeper onto their workers, not hoard it! That’s ridiculous! It is the workers who needed the money to spend on CPI!!

          This is why their CPI is a failure and this is why there will be no wage inflation despite a halt on slave imports and this is why business owners are baying for slaves…

          And this is why the debt wont grow and the economy will return to 2019.

          The government needed to make this clear to everyone but our insipid and impotent bunch of useless clowns and second-rate humans we call our leaders never made it clear what the actual agenda was.

          So now we get all upset that a few businesses aren’t paying back their jobkeeper. The fact they didn’t pass it to their workers is the real reason to get upset! Once again greed and stupidity gets in the way…

  6. Budget in 2 weeks and then time for the election. Can’t spin this out anymore.

    Just been in the Brisbane CBD and noticed a few more shops with for lease signs out the front door.

    Won’t be long now

    • I wouldn’t let increasing vacancy in commercial signal any worry. If you want a the sign that tells you everything is going to collapse (for real this time) look no further then vacancies in the RBA. If there are stil people working there asset values will increase for ever, along with the number of poor.

  7. Jumping jack flash

    All this anger, but please be patient.
    They missed their last opportunity to reset the New Economy and initiate controlled hyperinflation to allow the debt to grow fast enough and repay the last load of debt’s interest without deflation.

    All signs point to the slow melt of 2019 continuing, and slow melts dont stay slow for long with a couple of trillion dollars of debt anvil around the neck of the economy.

    An economy is just people, and people have debt. Colossal piles of it! Nonproductive debt is economic cancer and we’re riddled with it.

    Unfortunately i dont think its going to all crash in a few months, they will try their economic shenanigans with increasing amplitude and frequency to try and pay or relieve the interest burden of the debt, which will give it some additional time. How long is anyones guess but probably longer than 6 months.