RMBS arrears rise, auto delinquencies fall

Moody’s Investors Service says mortgage delinquencies will continue to increase in Australia, with rental yields in the two biggest cities to pose “some risk”.

According to figures released by the credit ratings agency, the delinquency rate for prime residential mortgage-backed securities (RMBS) more than 30 days in arrears rose to 1.44 per cent in February from 1.35 per cent in January, and from 1.34 per cent on the previous 12 months.

Looking ahead, Moody’s expects delinquencies will continue to rise, as its forecast of 2 per cent GDP growth in Australia in 2016 “remains below the long-term average of 3.5 per cent”.

“Record low rental yields in Australia’s two biggest cities, Sydney and Melbourne, will also pose some risk to RMBS performance,” it added.

Meanwhile, the 30-plus delinquency rate for auto loan asset-backed securities fell to 1.49 per cent in February from 1.52 per cent in January, but increased from 1.20 per cent on the 12 months prior.

[Related: RMBS arrears and defaults to rise, says Moody’s]

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