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Westpac overdue mortgages on the rise amid soft housing market

Sydney

AUSTRALIA'S Westpac Banking Corp on Monday reported a rise in the number of people missing mortgage payments amid a sluggish economy and a soft housing market.

The country's second-largest bank said 90-plus-day delinquencies, the overall percentage of loans that are about three months overdue, were up 8 basis points over the third quarter to 0.9 per cent.

Australia's housing market has been under immense strain, with housing prices having fallen every month since late 2017.

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But recent encouraging signs in June from Sydney and Melbourne, and interest building from Chinese buyers, a key base, have spurred hopes that things may be improving.

"Softness in property market contributing to an increase in the time it takes to sell a property have contributed to the rise in delinquencies and properties in possession," Westpac said in a statement.

Properties in possession now sit at 550, a jump of 68 over the quarter.

Many hope back-to-back rate cuts in the past couple of months may boost consumer sentiment across the housing market, which may also get a lift from recently passed tax cuts.

Stressed assets rose in Q3 by 10 basis points to 1.2 per cent, the lender said in a limited Q3 update.

The Sydney-based lender's common equity tier-1 capital ratio, a measure of the bank's core equity capital, inched down to 10.5 per cent at the end of June from 10.6 per cent at March 31. REUTERS