Australian Mortgage Arrears Are Currently Modest: Claim Is True, With an Important Trend Caveat

The claim is that Australian mortgage arrears rates are currently modest. The verdict is true, though the full picture requires acknowledging a clear upward trend that the simple 'modest' framing can obscure.

The headline numbers are unambiguous. According to APRA's Quarterly ADI Statistics for December 2024, non-performing housing loans — those 90 or more days past due plus impaired — sat at approximately 1.0–1.1% of total housing loans held by authorised deposit-taking institutions. The Reserve Bank of Australia's October 2024 Financial Stability Review confirmed the same figure and used precise language: arrears are 'low by historical and international standards.' For broader early-stage arrears, S&P Global Ratings reported 30-or-more-day delinquencies on Australian prime residential mortgage-backed securities at roughly 1.5–1.7% in Q4 2024, and Moody's 2024 arrears monitor placed 30-plus-day arrears at around 1.6% by mid-2024. Every major source lands in the same narrow band and applies the same characterisation: manageable.

The strongest version of a counter-argument is that arrears have risen sharply since 2022. That is factually correct and worth taking seriously. APRA and RBA data show 90-day arrears troughed at roughly 0.5% in 2021–22, meaning the current 1.1% figure represents a doubling in about two years. Moody's attributed this directly to the rapid interest rate increases from mid-2022 onward. Anyone citing the 'modest' framing without acknowledging this trajectory is giving an incomplete picture.

But the steelman breaks down on scale and context. A doubling from a historic low still leaves arrears below the 2019 pre-pandemic level of 1.0% and well below the peaks seen during the 2008–09 global financial crisis, per APRA's historical series. The RBA's April 2024 Financial Stability Review added a crucial structural point: most borrowers in arrears hold sufficient equity to avoid forced sales, and negative equity cases were estimated at less than 1% of all mortgaged properties. ABS Lending Indicators through 2024 show continued growth in total housing credit with no systemic deterioration in loan quality flagged. The denominator — a vast, mostly healthy mortgage book — matters enormously here.

What is genuinely true is that pockets of real stress exist. Lower-income borrowers and those who took on high loan-to-value debt at peak prices are under measurable pressure. The trend is upward, not downward. Calling arrears 'modest' at the aggregate level is accurate; using that aggregate to dismiss individual hardship would be misleading.

The manipulation pattern to watch for runs in both directions. Commentators warning of imminent mortgage crisis tend to cite the percentage increase in arrears since 2022 without anchoring it to the historical baseline — a classic missing-denominator error. Conversely, those offering blanket reassurance sometimes cite the aggregate figure without disclosing the rising trend or the concentration of stress in specific borrower cohorts. The honest read, supported by APRA, the RBA, S&P, and Moody's in unison, is: modest now, trend worth monitoring, not a systemic crisis.