This article is from the Australian Property Journal archive
THE 30+ day delinquency rate for prime residential mortgage-backed securities (RMBS) increased to 1.29% from 1.14% during the three months to 31 December 2015, according to Moody’s.
Moody’s assistant vice president – analyst Alena Chen said the increase was expected, reflecting higher spending levels in the run-up to the annual Christmas/New Year holiday season.
The rise was driven by the performance of prime RMBS issued by major banks, as well as non-authorised deposit-taking institutions (ADIs).
The arrears of RMBS deals comprising 100% low-documentation loans also increased, with the 30+ day delinquency rate rising to 4.08% at 31 December 2015 versus 3.43% at 30 September 2015.
Pre-lenders’ mortgage insurance (LMI) losses for Australian prime RMBS remained low at 31 December 2015. After accounting for LMI reimbursements, post-LMI losses were insignificant.
The total repayment rate for prime RMBS was at 24.08% at 31 December 2015, lower than the 25.47% averaged in 2015.
There was also an uptick in 30+ day delinquencies for Australian non-conforming RMBS during Q4 2015, with the rate increasing to 4.22% at 31 December 2015 versus 3.49% at 30 September 2015.
Meanwhile Moody’s found home prices across Australia’s major cities rose by 7.81% year-on-year for the period ended Q4 2015. Sydney and Melbourne registered the strongest increases of 11.47% and 11.19% respectively. Home prices in Perth and Adelaide fell by 3.73% and 0.13%.
“In 2016, we expect that Australian prime RMBS delinquencies and defaults will increase slightly from their current low levels, owing to below-trend economic growth.
“Nevertheless, losses will remain low, because of the build-up in home equity and deleveraging,” Chen said.
Australian Property Journal
