The 30+ day delinquency rate for prime residential mortgage-backed securities (RMBS) increased over the three months ending 31 March.
New analysis from Moody’s Investors Service saw the rate rise from 1.55% on 31 December 2016 to 1.65% at the end of March this year. Levels are currently higher than the 1.49% measured on 31 March last year.
An increase in delinquencies is common in the first quarter of each year as a result of increased spending during the holiday season.
“Delinquency rates rose for most Australian prime RMBS issuer groups during Q1 2017, except regional authorised deposit-taking institutions,” said Alena Chen, Moody's vice president and senior analyst.
30+ day arrears amongst non-ADIs was the highest increasing from 2.70% as of 31 December 2016 to 2.89% as of 31 March 2017. However, this was down from the 2.95% recorded as of 31 March last year.
For the major banks, the 30+ day delinquency rate was 1.67% as of end of March this year. This was an increase from the 1.53% recorded three months earlier and the 1.44% recorded in March the year before.
Delinquency rates amongst other ADIs were the lowest among all issuer groups at 0.66% as of 31 March 2016. This was a slight increase from last year’s results of 0.59% as of 31 December and 0.62% as of 31 March.
Analysts from Moody’s predict that Australian prime RMBS delinquencies will continue to increase for the rest of the year. This is due to a number of factors, including weak economic conditions in mining states, rising underemployment, weak wage growth and less favourable housing market conditions.
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