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Mortgage arrears increased for the second month in a row in November.
The Reserve Bank shows that loans worth $ 2.6 billion remain deferred.
Photo: 123rf
Data from central credit reporting agency Centrix shows there are now 15,000 delinquent mortgages, 2,000 more than in September.
When the pandemic first hit, concessions were made to allow retail banks to defer mortgage payments for distressed customers, although interest still accrued on the rest.
Of those who took the deferral option, 80 percent had exited, yet Reserve Bank data showed that loans worth $ 2.6 billion remained deferred.
Centrix CEO Keith McLaughlin said those customers were probably the ones making it the hardest.
“From our perspective, the concern that leads us to March is what will happen to the other 20 percent of deferred mortgages because they are probably the most affected consumers who are still in the scheme.
“We know that you are probably 2 to 3 percent more likely to default than any other mortgage.”
McLaughlin said credit card and personal loan defaults were also beginning to rise, with arrears rising 6% quarter-on-quarter.
He said January and February were typically high-default months anyway, and next year that trend would likely be exacerbated.
“There is concern about what will happen in the first quarter of 2021.”
Meanwhile, the overall demand for credit continued to rise to levels above those that existed before Covid.
“[Demand] it really started to get better two to three days before Black Friday, and while Black Friday was a record day, it hasn’t dropped much since then, “McLaughlin said.
“Demand right now is about 103 percent of what it was before Covid. This is largely due to an increase in e-commerce, which is the business of buy now and pay later, also with retail sales and , of course, properties “. “
