Home loan arrears of 90 days or more past due rose significantly in the December 2010 quarter and may increase further if the Australian property market becomes stagnant, said Fitch, in its report on Australian mortgage arrears for the quarter. Arrears over 90 days rose to 0.54 percent in the fourth quarter of 2010, compared with 0.48 percent in the third quarter of 2010. Much of this was reflected in the 30-plus day delinquencies, which rose to 1.37 percent, from 1.30 percent.
According to the rating agency, the rise was unexpected because no particular event had been expected to affect mortgage performance in Q4. Separate data from Standard & Poors also showed a rise in 90-plus day arrears, to 0.56 percent in December, from 0.53 percent in November. Fitch said the rise in 90-plus day delinquencies coincided with an increase in claims on lenders mortgage insurance, which rose 32 percent over the previous quarter to A$4.1 million.
While a rise in claims indicates more properties are being sold if the housing market turns stagnant such sales could decrease and thus push up 90-plus day arrears. Delinquencies over 90 days also rose in the low-doc segment, increasing to 3.03 percent from 2.79 percent, to touch the highest level since July 2009. S&P data showed such delinquencies rising to 2.27 percent in December, from 2.13 percent in November and 1.99 percent in October.
According to the rating agency, the rise was unexpected because no particular event had been expected to affect mortgage performance in Q4. Separate data from Standard & Poors also showed a rise in 90-plus day arrears, to 0.56 percent in December, from 0.53 percent in November. Fitch said the rise in 90-plus day delinquencies coincided with an increase in claims on lenders mortgage insurance, which rose 32 percent over the previous quarter to A$4.1 million.
While a rise in claims indicates more properties are being sold if the housing market turns stagnant such sales could decrease and thus push up 90-plus day arrears. Delinquencies over 90 days also rose in the low-doc segment, increasing to 3.03 percent from 2.79 percent, to touch the highest level since July 2009. S&P data showed such delinquencies rising to 2.27 percent in December, from 2.13 percent in November and 1.99 percent in October.
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