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.