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The number of deferred loans has fallen below 300,000, according to new figures from the Australian Banking Association. That’s a reduction of nearly 70% from the peak of the COVID-19 pandemic, when Australian banks deferred more than 900,000 loans.
That’s positive news for the property market, according to Adrian Kelly, president of the Real Estate Institute of Australia.
“This is good news for those living in investment properties, as it provides increased security to tenants,” Kelly said. “It also means catastrophic forecasts for Australia’s housing market made at the start of CV19 are simply not coming to fruition, so customers should have increasing confidence to buy and sell.”
Kelly also said that data from the Australian Prudential Regulation Authority showed that overall household saving in Australia rose from March to October.
“This has contributed to banks seeing borrowers starting to pay back loans,” he said.
Kelly commended the government and the banks for rolling out the loan-deferral initiative at the outset of the pandemic.
“The REIA supported the bank-loan deferral program from day one because we knew our members were receiving a high volume of phone calls from property owners who were either informing us that their tenant had lost employment or couldn’t pay the rent, or they themselves had also suffered some employment issues which could impact their ability to pay their own home mortgage,” he said. “The actions of federal and state governments have had a strong impact to counter the severity of the downturn.”
Kelly also said that rental eviction moratoriums – another major COVID-19-related policy – were gradually coming to an end.
“Anecdotal evidence from Queensland where the moratorium has ended suggests that this has had limited to no impact, and the sky is not falling in,” he said. “As other jurisdictions come out of the end of their moratoriums, this could even build the case for the end of these moratoriums being brought forward.”