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RMBS arrears fall to 10-year low

Australian housing loans in arrears for prime residential mortgage-backed securities (RMBS) dropped to the lowest level in more than a decade, according to Standard & Poor’s.

New research by the credit ratings agency revealed that arrears levels for prime RMBS fell to 0.93 per cent in August – down from 0.96 per cent in July.

S&P noted that this is the lowest level of arrears for the prime RMBS sector since 2004.

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Additionally, loans in arrears for more than 90 days, categorised as ‘severe’ fell to the lowest level since 2009.

Meanwhile, non-conforming RMBS in arrears recorded a fifth consecutive month of decline in August, dropping to 4.60 per cent from 4.69 per cent a month earlier.

“While we tend to see falling arrears after the first quarter due to seasonal factors, both prime and nonconforming arrears are lower than they were a year earlier,” S&P credit analyst Narelle Coneybeare said.

“In our view, the current arrears trend reflects the historically low interest-rate environment and general macroeconomic conditions, including relatively stable employment levels.”

RMBS arrears fall to 10-year low
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