The whole amount of money stashed in offset accounts has hit a brand new document excessive of $265.45 billion, a 16 per cent rise because the begin of the RBA hikes.
Money in residential offset accounts within the December 2023 quarter rose by $8.25 billion (3%) from the earlier quarter and a rise of $37.40 billion (16%) since earlier than the speed hikes within the March quarter of 2022, in line with APRA’s quarterly authorised deposit-taking establishment property publicity statistics.
Offset balances now account for almost 11 per cent of credit score limits, the very best share because the document started in 2019.
Total quantity in residential offset accounts
| Dec quarter 2023 | Change from earlier quarter | Change since RBA hikes (March 2022 quarter) |
| $265.45 billion | +$8.25 billion +3% |
+$37.40 billion +16% |
Source: APRA Quarterly ADI Property Exposure statistics for Dec 2023 quarter, launched 12 Mar 2024. Based on all authorised deposit-taking establishments as collected by APRA.
Overdue mortgages proceed to rise
The worth of mortgages 30-89 days overdue have risen for the fifth consecutive quarter. The December 2023 quarter noticed a rise of $1.54 billion, to a complete of $13.28 billion. This is greater than double the rise within the earlier quarter of simply over $708 million.
As a share of credit score excellent, the proportion of mortgages 30-89 days overdue continues to be comparatively low at 0.60 per cent.
This is up from 0.42 per cent recorded within the December 2021 quarter, when charges have been at document lows, however decrease than pre-COVID ranges the place in December 2019 the worth of loans 30-89 days overdue was 0.70 per cent.
Loans 30-89 days overdue
| Quarter | % share of credit score excellent |
| Dec 2019 | 0.70% |
| Dec 2020 | 0.57% |
| Dec 2021 | 0.42% |
| Dec 2022 | 0.42% |
| Dec 2023 | 0.60% |
Source: APRA Quarterly ADI Property Exposure statistics for Dec 2023 quarter, launched 12 Mar 2024.
Loans 30-89 days overdue as a proportion of credit score excellent
Source: APRA Quarterly ADI Property Exposure statistics
Non-performing loans additionally on the rise
Non-performing loans, the place the borrower has missed a mortgage compensation by 90 days or extra, or the mortgage is impaired, can be on the rise, with the latest APRA information exhibiting a $1.30 billion improve between the September and December quarters.
However, as a share of credit score excellent, it’s low by historic requirements, sitting at 0.85 per cent.
This is up from 0.68 per cent recorded a yr in the past, however decrease than pre COVID ranges the place in December 2019, the share of non-performing loans was 0.90 per cent.
Non-performing mortgages as a share of credit score excellent
| Quarter | % share |
| Dec 2019 | 0.90% |
| Dec 2020 | 1.01% |
| Dec 2021 | 0.82% |
| Dec 2022 | 0.68% |
| Dec 2023 | 0.85% |
Source: APRA Quarterly ADI Property Exposure statistics for Dec 2023 quarter, launched 12 Mar 2024.
Non-performing loans as a proportion of credit score excellent
Source: APRA Quarterly ADI Property Exposure statistics
Owner-occupiers extra more likely to be in arrears than traders
The APRA information for December reveals 0.85 % of owner-occupier loans are in arrears, whereas simply 0.75 per cent of investor loans are in arrears.
Investors paying interest-only are least more likely to be represented within the arrears information, with simply 0.35 per cent of investor interest-only loans in arrears.
This is unsurprising. Not solely are the compensation necessities on interest-only phrases decrease, but additionally, traders usually have extra levers to tug to get themselves out of economic issue, whether or not that’s rising a tenant’s lease or promoting a property.
Non-performing loans as a proportion of credit score excellent in line with mortgage kind
| Loan kind | Dec-23 |
| Owner-occupiers | 0.85% |
| Investor | 0.75% |
| Owner-occupier interest-only | 0.79% |
| Investor interest-only | 0.35% |
Source: APRA Quarterly Property Exposure statistics, December 2023. Based on the worth of time period loans for every borrowing kind.
Exceptions to serviceability rise as banks proceed to free mortgage prisoners
A complete of $7.29 billion in new home loans written by ADIs within the December quarter have been authorised exterior the banks’ serviceability insurance policies.
This is an increase of almost 9 per cent from the September quarter and a hefty 75 per cent improve in comparison with the June quarter.
Value of recent loans processed exterior of banks’ serviceability insurance policies
Source: APRA Quarterly ADI Property Exposure statistics for Dec 2023, new lending, ADI’s, launched 12 Mar 2024.
The sharp rise comes after three of Australia’s large 4 banks, Westpac, CBA and NAB introduced in May, June and July respectively, they would scale back their commonplace serviceability buffers to 1 per cent for choose debtors who couldn’t refinance beneath the three per cent buffer, however nonetheless met a strict set of different standards.
Under APRA’s pointers banks can course of loans exterior of their serviceability insurance policies, offered it’s finished in a “prudent and limited” method. At 4.8 per cent of all new loans written within the quarter for December 2023, this rise is unlikely to ruffle feathers with the regulator.
High debt-to-income loans proceed to lower
The whole worth of loans with a debt-to-income of six instances or extra dropped for the sixth quarter in a row to only $8.33 billion – almost one fifth of what it was on the peak in December 2021.
Proportion of recent mortgages with a debt-to-income ratio of six instances or extra
| Dec quarter 2023 | Sep quarter 2023 | Peak (Dec 2021) |
| 5.6% | 5.7% | 24.3% |
Source: APRA Quarterly ADI Property Exposure statistics for Dec 2023, new lending, ADI’s, launched 12 Mar 2023. The proportion relies on new owner-occupier and investor loans.
Eden Radford
External Comms Lead
Eden Radford is the External Comms Lead for RateMetropolis, bringing almost a decade of expertise throughout the finance providers and expertise sectors. In prior years, Eden has labored with Lendi, Aussie, Xero, Qualcomm, Accenture, and Dyson, amongst others, whereas being a pillar of experience for presidency shoppers and contracts, as effectively. Eden has a ardour for bettering monetary literacy, information storytelling and serving to folks higher perceive the selections they will make about their very own funds.
Eden Radford is the External Comms Lead for RateMetropolis, bringing almost a decade of expertise throughout the finance providers and expertise sectors. In prior years, Eden has labored with Lendi, Aussie, Xero, Qualcomm, Accenture, and Dyson, amongst others, whereas being a pillar of experience for presidency shoppers and contracts, as effectively. Eden has a ardour for bettering monetary literacy, information storytelling and serving to folks higher perceive the selections they will make about their very own funds.
