Australian mortgage borrowers are starting to recover from the financial setbacks of the COVID-19 outbreak, as the number of loans on hold continue to drop, according to the latest figures from the Australian Banking Association (ABA).
The number of mortgage deferrals have gone down by 66% from the peak in June at 493,440 to 169,677 this month.
"Australian banks have played a major role in carrying the economic burden of the pandemic for their customers. The good news is that the majority are now bouncing back as they restart their loan repayments," said Anna Bligh, CEO of ABA
Adrian Kelly, president of the Real Estate Institute of Australia (REIA), said the decline in the number of deferred loans indicate a boost in the property market sentiment.
"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 the COVID-19 outbreak are simply not coming to fruition so customers should have increasing confidence to buy and sell."
Overall, the number of deferred loans, which include mortgage and business loans, has fallen below 300,000, reflecting nearly 70% from the peak in June.
The number of loans on hold is expected to fall further in the coming weeks as more borrowers reach the end of their six-month deferrals.
“It’s great to see a lower than expected number of people needing to extend their deferral period," said Bligh.
Still, banks are expected to continue working directly with their clients who might still be needing to extend their deferral period.
"Don’t wait till you are in over your head, talk to your bank, they’ll help you find a way through this. Don’t tough it out on your own," Bligh said.