Mortgage stress not rising

Approximatley 2% of Australian households with owner-occupier home loans spent more than 50% of their disposable incomes on home loan repayments.

A survey of Household, Income and Labour Dynamics (HILDA) in Australia, produced by the Melbourne Institute shows that more than 90% of owner-occupier households with home loans, either had an LVR below 80% and, or, a debt-servicing ratio below 30% of income.

The RBA said the share of households with negative equity “is estimated to be very low, with HILDA data suggesting that these households have historically been no more likely to be behind in repayments than other indebted households.”

The RBA also noted the rate of mortgagees’ court applications for property possession declined substantially over the second half of 2009. For New South Wales and Victoria, the RBA said rate of possession applications had fallen to 2005 levels, after a number of years when it had been higher than average. Queensland and Western Australia have also seen a substantial falling off in possession activity.