...Mortgage Performance Worsened: 30+ days delinquencies increased by 7bp to 1.15% in 4Q14 despite the low interest rates, high house prices, and competitive lending. However, performance was still better than a year before. Key Performance Drivers Stable: The Reserve Bank of Australia cut rates further in February 2015 because of rising unemployment rate during 2014. Unemployment a Potential Driver: Rising unemployment might have contributed to 90+ day arrears increasing by 3bp to 0.50% despite the strong housing market. House Prices Still Strong: House prices remain strong, with yoy growth of 7.9% helping to clear long-dated arrears, and limiting losses and claims to lenders' mortgage insurance (LMI) providers. Losses Remain Limited: The annualised loss rate improved to 0.03% from 0.04%. Losses are expected to remain limited, reflecting the strong economy and rising house prices. Stabilisation Expected in 1Q15: Fitch expects that the seasonal Christmas spending will be offset by the February...
