SYDNEY: Australian banks doubled their lending to the most leveraged home owners in the March quarter, just as the country shut its economy due to the Covid-19 pandemic, data showed, putting them at risk of acute mortgage stress if prices fall as predicted.
Figures released yesterday by the banking regulator showed new home loans to borrowers with deposits of 5% or less of their homes’ value increased A$1.8bil (US$1.26bil) in the three months to March, a 52.% jump from the US$1.2bil the banks lent to the most leveraged cohort a year before.