Reserve Bank of Australia - Jonathan Kearns, Head of Financial Stability.

  • arrears on housing loans have risen
  • arrears are by no means at a level that poses a risk to financial stability
  • over 99 per cent of housing loans are on, or ahead of, schedule
  • loan arrears are lower in Australia than in many other advanced economies
  • arrears driven by weak income growth, house price falls, rising unemployment in some areas
  • roll-over from interest-only loans may have added to arrears, but temporary
  • says tighter lending standards might also temporarily add to arrears
  • says arrears rate could continue to edge higher for a bit longer
  • arrears should not pose a risk as long as unemployment stays low

Kearns not expressing any concern on arrears at all. over 99% of loans on or ahead of schedule he says. If so little wonder he is not concerned.

This:

  • arrears should not pose a risk as long as unemployment stays low

Another indication the Bank is watching developments in the labour market.