More than three quarters of a major bank's mortgage customers are substantially ahead on their mortgage repayments.
According to data from Commonwealth Bank, around 78% of customers are up to two and a half years ahead on their mortgage repayments. The banks says this is due to record low interest rates and rising prices that have given them a buffer to any house price collapse.
However, numbers from the country’s other major lenders at the end of March are less impressive, providing only a small shield to the potential bursting of the housing bubble.
According to
NAB’s first-half profit results, their customers are 14.7 monthly payments in advance on average. For
ANZ, the proportion of their customers more than 30 days ahead of repayments fell to 40%.
Westpac customers who are ahead of repayments also fell to 72%.
In spite of the record low interest rates, Westpac’s mortgages 90 days past due jumped 22% in the six months to March 31, while ANZ’s rose up to 70 basis points across all states - especially in mining states like Queensland and Western Australia.
NAB’s bad home loans made up the bulk of a 14% rise in bad debt charges in the first half.
“History would suggest that Australian house prices could remain flat for a prolonged period and perhaps even fall,” said CLSA banking analyst Brian Johnson.
“But given Australian housing has been the principal source of loan growth in recent years and now comprises 43-61 per cent of major bank loan portfolios… a ‘collapse’ in ‘bubblish’ Australian house prices could be problematic for the Australian banks.”
