Australian Banks Defer Repayments on $98 Billion of Home Loans
Australian Banks Defer Repayments on $98 Billion of Home Loans
(Bloomberg) -- Australians suffering financial difficulties caused by the coronavirus pandemic were granted six-month deferrals on repayments covering A$153.5 billion ($98.4 billion) of mortgages.
A total of 429,000 home loans are covered by such assistance, the Australian Banking Association said on its website. In all, 703,000 borrowers have been granted deferrals, covering A$211 billion of loans.
Prime Minister Scott Morrison said Friday that the “clock is ticking” to reopen the economy, because the government and financial institutions cannot maintain extraordinary support measures indefinitely. Australian businesses slashed a record 594,000 jobs last month after lockdowns to constrain the pandemic shut down much of the economy. Surging demand from customers for support amid the crisis spurred banks to hire 1,500 new staff and redeploy more than 2,200, the ABA said.
The government is supporting 6 million workers via its JobKeeper program, which provides wage subsidies for businesses with revenue hit by the pandemic. That’s part of more than A$25 billion in fiscal stimulus deployed, with another A$30 billion expected to flow out in the next month. The Reserve Bank of Australia predicts the economy will contract 10% from peak-to-trough this year and expects unemployment to surge to around 10% by June.
“Australian families who are financially affected by this crisis have had the breathing space they need with a six-month deferral on their home loan repayment while they chart a path through to the other side of this downturn,” ABA Chief Executive Officer Anna Bligh said in the association’s statement.
Australian state governments have started relaxing some of the social distancing rules introduced to reduce the chance of the coronavirus spreading. New South Wales and Victoria, the two most populous states, are taking a much slower path than most of the other provincial governments. Australia has 7,200 confirmed cases of the disease, leading to 98 deaths.
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