Demand from households for credit spiked to its highest level in many years over the June 2024 quarter, reaching $57.5 billion, the ABS said yesterday.
The ABS’ quarterly National Accounts: Finance and Wealth, however, show a softening in demand for credit from business, to $37 billion.
Separately, the RBA in in half-yearly Financial Stability Review, shared data on rising levels of home loan arrears.
Arrears of 30 days or more for owner-occupiers are approaching 1.5 per cent. Arrears of 90 days or more are approaching one per cent.
The share of variable-rate owner-occupier borrowers who are estimated to have had essential expenses and scheduled mortgage repayments exceed their income, leading to an estimated cash flow shortfall, has remained at around 5 per cent, the Reserve Bank said.
Lower income borrowers are more likely to be in this group.
“The share of borrowers more at risk of falling behind on their loan – that is, those estimated to have a cash flow shortfall and low buffers – has remained less than 2 per cent of all variable-rate owner-occupier borrowers” the RBA said.
“Only a very small share of this group is in negative equity, including because of ongoing growth of housing prices.
“This group of borrowers who are both at risk of falling behind on their loans and in negative equity accounts for less than 0.2 per cent of variable-rate owner-occupier loans outstanding.”
The RBA said “while conditions will remain challenging for the group of borrowers already experiencing acute budget pressures, our projections imply that most mortgagors would remain able to service their debts.
“Less than 2 per cent of borrowers are projected to be at risk of depleting their liquid savings buffers at any time before the end of 2026.”
The RBA raised a red flag on the outlook:
“Information received through the RBA’s liaison program indicates that more people than usual are seeking support from community organisations, often for the first time, including dual-income households and mortgagors.”