Despite surging property prices and the increasing value of home loans, delinquency rates for Australian mortgages are at record lows.
According to figures released by national mortgage insurer, Genworth, 0.36% of its mortgage portfolio was delinquent. The lowest level of delinquency was from the ACT, which recorded a rate of 0.21%.
On the other hand, the figures revealed that Queensland and South Australia are suffering from disproportionately higher rates than any other state, as the unemployment rate remains stubbornly high.
Delinquencies peaked in 2012 at 0.53% and have been lowering ever since, although there has been a slight increase in the past six months as Genworth has aggressively increased the loans it insures as the value of loans has risen.
However, The Australian
reports that delinquencies will only increase over the next year, according to Andrew Beer, the director of the Centre for Housing, Urban & Regional Planning at the University of Adelaide.
“The delinquency rate is at historic lows, and they remain low by international standards,” he told The Australian.
“One of the key issues is the change in lending practices since the global financial crisis and that interest rates have remained very low since then.
“Non-conforming lending practices have disappeared, although there are some indications some of those practices are coming back particularly in Sydney and Melbourne where the market is booming and finance is in high demand.”