“According to a global rating agency, the number of Australians who are not capable of paying their mortgage repayment on time hits a record high. Fitch Ratings, a global rating agency says the number of Australian borrowers falling behind on repayment by 30 or more days climbed from 1.4% to 1.79%.
Real estate investment companies have been taking the blow of the rising interest rates and according to the agency one of the reason for the significant Queensland floods and other natural disasters and increasing interest rates will worsen the situations.
Rating agency is still positive as the market is not as bad as Europe and US. First quarter of the year was tight for borrowers due to significant expense during Christmas and holidays. Cyclone Yasi, Queensland and Victorian floods worsened the situation a lot.
In a recent message to the public, Ric Battellino the deputy governor of the Reserve Bank of Australia said that borrowers were resilient and arrears rates were low as compared to international market. He added that Australians are now more cautious at borrowing than in the past 15 years when households became increasingly in debt.
He also said households are now borrowing at a slower rate and saving more but there was a raising concern that some of these at least may had over committed themselves financially in order to enter the market and are now vulnerable to rising interest rates.
The Reserve Bank is expected to lift interest rates again before the end of the year.
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