Share of CBA customers struggling to repay their mortgages has climbed to 12-year high
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New lending to property investors fell at its fastest pace on record through the three months to September, as landlords adjust to higher taxes against a backdrop of plunging property prices and rising interest rates.
The latest figures come as the country’s biggest lender, the Commonwealth Bank, reported that the share of its customers struggling to repay their mortgages had climbed to a 12-year high.
As Jim Chalmers, the treasurer, was again forced to defend his budget reforms, CBA’s quarterly trading update showed the share of borrowers 90 days or more behind on their repayments lifted from 0.73% of total lending, to 0.8%.
The last time arrears rates were higher was in 2014, according to previous trading updates.
Nathan Zaia, a senior equity analyst at Morningstar, said rising arrears rates were happening across the banking sector, and that they “probably hadn’t peaked”.
“Looking at arrears and people falling behind on their home loans, the trend has definitely been picking up,” Zaia said.
But the recent increase was from a low base, he said.
“We’ve had a long period of uncharacteristically very low arrears rates, so it’s not unexpected that they are starting to drift higher.”
