Arrears stabilise in September
Loans underlying Australian prime residential mortgage-backed securities (RMBS) that are greater than 30 days in arrears fell to 1.52 per cent last quarter, signalling strength in the mortgage market.
According to the latest Standard and Poor’s report, subprime RMBS arrears also fell by 127 basis points to 10.38 per cent during the same period.
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"The reduced arrears levels indicate signs of recovery after weather-related disruptions in early 2011," Standard & Poor's credit analyst Vera Chaplin said.
"We expect Australian RMBS mortgage portfolios' performance to remain stable, underpinned by Australia's positive economic prospects and continued strong labor market supporting debt serviceability.
“However, the potential flow-on effect of economic and financial market uncertainties in the eurozone to Asia Pacific region could weaken Australia's currently positive economic outlook and undermine consumer and business confidence."
