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Decline in Mortgage Arrears as Home Prices Set to Rise

Fitch Ratings Forecasts 4-6% Increase in 2025

Decline in Mortgage Arrears as Home Prices Set to Rise?w=400

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

Recent data from Fitch Ratings' Dinkum RMBS Index indicates a decline in Australian mortgage arrears, with 30-plus day arrears falling to 1.13% in the fourth quarter of 2024.
This improvement suggests that homeowners are managing their mortgage obligations more effectively, despite ongoing economic challenges.

Concurrently, Fitch Ratings forecasts a 4-6% increase in national home prices throughout 2025. This anticipated growth is attributed to limited housing supply, a tight rental market, and high net migration, all of which contribute to upward pressure on property values.

The Reserve Bank of Australia's (RBA) recent cash rate cut in February 2025 is expected to further support this trend by making borrowing more affordable. Fitch Ratings anticipates additional rate reductions within the year, which could lead to a continued decrease in mortgage arrears.

However, the report also highlights that loans originated in 2023 have higher arrears rates compared to previous years, indicating that newer borrowers may be facing greater financial strain. This underscores the importance of prudent financial planning and risk assessment for both lenders and borrowers.

In summary, while the decline in mortgage arrears and the projected rise in home prices present a positive outlook for the Australian housing market, stakeholders should remain vigilant. Monitoring economic indicators and maintaining responsible lending and borrowing practices will be crucial in sustaining this momentum.

Published:Saturday, 28th Feb 2026
Source: Paige Estritori

Please Note: If this information affects you, seek advice from a licensed professional.

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Finance News

Decline in Mortgage Arrears as Home Prices Set to Rise
Decline in Mortgage Arrears as Home Prices Set to Rise
28 Feb 2026: Paige Estritori
Recent data from Fitch Ratings' Dinkum RMBS Index indicates a decline in Australian mortgage arrears, with 30-plus day arrears falling to 1.13% in the fourth quarter of 2024. This improvement suggests that homeowners are managing their mortgage obligations more effectively, despite ongoing economic challenges. - read more
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In January 2026, Australia's housing market witnessed a remarkable 10.6% increase in home loan approvals compared to the previous month, significantly surpassing December's 4.7% growth. This surge indicates a robust demand for housing credit, reflecting the market's resilience despite existing challenges. - read more
Anticipated 4.8% Rise in Australian Property Prices for 2026
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As we progress through 2026, the Australian property market is poised for continued growth, with forecasts predicting a 4.8% increase in property prices across capital cities. This projection follows an 8.6% rise in 2025, indicating sustained momentum in the housing sector. - read more
Implications of RBA's Interest Rate Hike on Property Prices in 2026
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The Reserve Bank of Australia (RBA) is expected to implement an interest rate hike in early 2026, a move that could significantly influence the trajectory of property price growth. This decision comes in response to rising inflation and aims to stabilize the economy. - read more
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October 2025 marked a significant milestone for first-time homebuyers in Australia, with loan applications surging by 39.2%. This remarkable increase is largely attributed to the federal government's expansion of the 5% Deposit Scheme, which has made homeownership more accessible to a broader segment of the population. - read more
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