RETAIL BANKING | Tony Chua, Australia

Westpac’s CEO to calm mortgage fears amidst experts’ warnings

Kelly defied property experts’ forecasts by saying that although mortgage arrears have increased Australia’s economy will keep the housing market intact.

Westpac chief executive Gail Kelly has gone out of her way to reassure the market the recent rise in mortgage arrears is not out of the ordinary and the bank is not concerned that more people are unable to make their repayments.

However, while property experts say they are not concerned with the current rate of arrears, they say they could keep rising if interest rates are increased and wages remain flat.

The comments come just days after Fitch released a report showing delinquencies are at a record high and could increase further.

Speaking with the Australian Financial Review, Kelly said although mortgage arrears have increased the fundamentals of the economy will keep the housing market intact.

“It’s really a softening rather than any underlying concerns so I remain very confident about the Australian housing situation…I think delinquencies will pick up but they are off a low base.”

Kelly also said she hoped the Reserve Bank would delay in increasing interest rates, saying “two in a row would be a problem”.

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