WA now an arrears hot spot

The downturn in property prices in Western Australia is generating some increased heat for lenders in a market that experienced the housing bubble later than most other Australian capitals.

Staff of the Reserve Bank of Australia rounded up current data on applications by lenders for property repossessions from several state courts.

The level of applications for repossessions has more or less stabilised in New South Wales, Victoria and also in south-east Queensland.

The RBA noted that the one exception is Western Australia, where the sharp rise in repossessions is consistent with rising home loan arrears.

Most of these rising arrears, in WA and elsewhere, still appear to be concentrated among non-bank lenders.

The RBA, once again drawing on unpublished APRA data, said the proportion of loans that are in arrears by 90 days or more for banks was 0.41 per cent at June 2008, up a little from the end of 2007 but unchanged from a year ago.

The arrears rate on prime, securitised housing loans was 0.57 per cent as at June 2008.

The RBA said that it estimated around 17,000 borrowers were 90 or more days behind on their mortgage repayments, a rise of about 2000 over six months. This estimate covers all types of home loans from all lenders.