Loans put on hold during recession shrinks

Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)

 

Australia’s strong economic revival from last year’s recession and a tumbling unemployment rate has seen the number of deferred home and business loans shrink further in March.

At the height of the pandemic last year, Australian banks offered struggling families and businesses the ability to defer repayments on their loans.

At the peak, over 854,606 loans were deferred. As of March this year, that had shrunk to just 4569.

“These figures reflect the impressive recovery Australia’s economy is experiencing after facing a one in 100-year pandemic,” Australian Banking Association CEO Anna Bligh told AAP.

“The fact that unemployment is lower than expected and the economy has rebounded faster than we anticipated is great news for the vast majority of home owners and small businesses.”

As of March 31, just 0.5 per cent of loans remained deferred, accounting for just 0.03 per cent of all facilities.

There are 3170 mortgages that remain deferred and 508 business loans.

Although the large-scale deferral program has come to an end, banks are providing tailored support through a range of measures, including further deferrals and payment restructuring.

“Banks will continue to support those households and businesses still doing it tough this year, taking a fair and compassionate approach to get people through the pandemic,” Ms Bligh said.

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