In late June 2020, according to the (ABA) Australian Bankers Association 500,000 Australian home mortgages, and 200,000 small business loans had been placed on payment deferral positions. As at middle of October 2020, 45% of all those deferred home loans and 41% of all small and medium sized business loans had resumed payments, respectively. That was based on data provided by Australia’s seven largest banks.
October 31st is a key date as this was the end of the initial six month deferral period. It will be important to see what the result is once data is collated using that date . Some of the remaining loans that have not resumed payments may have had there planned deferral position extended? Or the lenders may be moving to recover debts from sale of the associated assets? This will likely play out over the next three to six months with a more clear picture evident as at say 30th April 2021.
Some key factors that will impact this from both a positive and negative aspect are:-
The extent of economic bounce back from Covid restrictions being eased?
The winding back of Government assistance Job Keeper & Job Seeker subsidies
The ability for jobs to be created through the Government job maker program, tested via unemployment, underemployment, job vacancy data?
Prevailing low interest rates.
Flow on economic effect from recently announced infrastructure spending on social housing (NSW and Victorian Governments), supporting the construction sector and creating jobs.
Migration of people out of the major cities due to Covid & also the realisation that they can run their business or work as an employee via remote workplace location.
The recently signed (RCEP) Regional Comprehensive Economic Partnership agreement. 14 Asian countries have signed this now very large and important trade agreement. China was included in that, which will hopefully assist in maintaining the flow of trade exports from Australia to China after recent political hiccups created blockages to that.
Now the importance of the above to you, if you are finding yourself in a position where your loan was deferred, your employment and or material circumstances have changed, please contact Michael on 6583 2211 so he can review the position and take immediate steps to assist.