Mortgage Delinquencies Increasing, Inflation at Zero, Rate Cut Imminent
Channel: Daily Insight
Date: 02/05/2019

The Australia and New Zealand Banking Group (ANZ) released their half-year results yesterday, and the picture was pretty bleak with regard to Australian property and mortgage stress. ANZ boss, Shayne Elliott, spoke of the deepening mortgage crisis that is sweeping across Australia. If we take a look at the data, it certainly looks like a trend to me. This is a chart of Australia Home Loan 90+ Day Delinquencies. It shows that over the past three or so years, delinquency rates have been stepping up in pretty much every state and territory. In Western Australia, it certainly looks like a very worrying trend. Thanks to a slowdown in mining, WA’s economy has been slowing over recent years. This has led to rising unemployment and mortgage stress. Using Western Australia as a guide, it doesn’t take much imagination to realise what would happen if unemployment rates increased in the eastern states. In the three months to April, ANZ home lending has fallen 3%. However, it’s not the cost of borrowing that is causing people to become delinquent. We can see that mortgage rates have been travelling along at historic lows. The RBA’s cash rate has been sitting at 1.5% since August 2016 — that’s more than two-and-a-half years! It’s not lack of cheap mortgages that is hurting Australians — it’s falling house prices.

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#australianeconomy #mortgage #housingmarket #housingprices #realestate