“But we also have to realistically assess every customer at an individual level, and ensure that they will be in a position to restart, and if they are not, then there is no point in just kicking that can down the road.”
Mr Comyn mentioned Victorians accounted for greater than 60 per cent of latest requests for help, “which makes perfect sense”.
Dr Kennedy urged Mr Comyn and different financial institution chiefs to point out “forbearance” amid continued uncertainty in regards to the financial outlook. “I think the banking sector is going to have to think very carefully about that, too, because some sectors may well be viable depending on how the health side of things unfold … Matt will have to be thinking about his customers in Victoria versus other states and how their circumstances unfold.”
Dr Kennedy mentioned the banking sector had “done a very good job” to this point of contacting clients to restart funds, the place doable. However, “for those sectors that remain very badly affected, it is going to have to be a very careful, careful adjustment, and almost some forbearance and a continued watching of circumstances,” he mentioned.
About 10 per cent of Australian loans have been topic to deferrals on the finish of June, together with $195 billion in housing loans and $55 billion in loans to small companies, in keeping with information from the prudential regulator.
According to the Australian Banking Association, fee deferrals have been granted on 900,000 loans throughout COVID-19. By the top of July, 13 per cent of those had resumed repayments. Another 100,000 restarted in August, it’s estimated, leaving greater than 600,000 loans nonetheless in limbo.
Mr Comyn mentioned there have been little question “going to be some very difficult circumstances” however that he was assured a “fiscal cliff” – of sudden mortgage restarts and withdrawal of assist funds – had been averted.
“I feel we have now obtained now an orderly transition, and that avoids a cliff, each at a fiscal degree and from a banking perspective.
“Hopefully nearly all of clients throughout the business will probably be in a robust sufficient place to restart their repayments.”
National dwelling costs have fallen every month since May, in keeping with CoreLogic. Prices in Melbourne have been down 3.5 per cent over the three months ended August and down 2.1 per cent in Sydney.
Economists equivalent to AMP’s Shane Oliver proceed to tip value falls of 10 per cent, though Westpac economists final week predicted a fall of simply 5 per cent by the center of subsequent yr, adopted by a 15 per cent rebound over the next two years.
Dr Kennedy mentioned falling house costs have been one thing “that we might want to watch fastidiously” given the potential hit to confidence and perceptions of wealth.
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Jessica Irvine is a senior economics author with The Sydney Morning Herald.