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Australian delinquencies reached record highs in the fourth quarter of 2008, two reports revealed this week.
Moody’s Investors Service said yesterday that delinquencies of greater than 30 days reached a high of 1.58 per cent in the December quarter.
Research released by Standard & Poor’s yesterday also showed arrears on prime RMBS home loans rose to a new high of 1.76 per cent during the same period.
While these figures represent a small fraction of total home loans Standard & Poor’s warned that arrears were likely to increase off the back of the deteriorating economic conditions.
“There is no doubt that the 4 per cent cut in the official cash rate since September 2008, and reduction in living costs and expenses, should help ease the financial pressures experienced by some households,” said Standard & Poor’s credit analyst Vera Chaplin.
“Nevertheless as economic conditions continue to deteriorate this is likely to be more than offset by the impact of potential job losses and/or significant reduction in household disposable income.”
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