Australia | Jun 19 2006
By Rudi Filapek-Vandyck
Arrears on all categories of home loans in Australia increased in April compared to March, trade publication for the banking industry The Sheet reports this morning. The conclusion is drawn from the latest monthly report on loan arrears published by ratings agency Standard & Poor’s.
According to The Sheet, arrears in excess of 30 days on prime home loans in Australia increased to 1.17% in April 2006 from 1.12% in March 2006, and up from 0.96% in November 2006.
Home loan arrears, analysed by type of lender, increased most markedly over the course of the last months for loans originated by building societies and credit unions (to a below average level of 0.9%). The same applies to the category S&P calls ‘other banks’, which includes foreign banks and Members Equity Bank where arrears remain well below average still at 0.63%), The Sheet reports.
Also, arrears remain the highest among loans originated by non-bank lenders (such as GE Money) with arrears in this category at 1.79%, compared with 1.46% six months ago.
The highest proportion of loans overdue by more than 90 days are to be found among the non-banks, with 0.72% of loans from these lenders in arrears by more than three months.
Arrears in excess of 30 days on non-conforming or sub-prime loans increased to 13.29% in April 2006 from 11.09% in March 2006.
According to The Sheet, arrears on sub-prime loans fluctuated in a band between 9.6% and 10.9% through 2005, but have edged upwards over the first four months of 2006.