Despite a lengthy lockdown in Victoria and the ongoing battle against COVID, all signs are pointing towards a more positive economic outcome than previously anticipated. Mortgage deferrals are down as more homeowners return to repaying their mortgage, unemployment in certain regions appears to be recovering to pre-COVID levels, and a new report has highlighted opportunities that some industries could capitalise on in the years to come.
Mortgage deferrals decreasing
Earlier this year, Australian borrowers deferred repayments on $240 billion worth of loans, with $167 billion of that coming from homeowners and a further $55 billion from the small business sector.
While deferred loans still account for close to 9 per cent of total lending, the numbers show more Australians are repaying their loans than taking on deferrals.
Steve Mickenbecker, financial services executive with comparison site Canstar, says it’s a step in the right direction.
“Deferrals ran up quickly in April, peaking in May at a concerning 10 per cent of total lending,” he said.
“The good news is that deferrals have since trailed off to around 9 per cent, with June and July combined showing more coming off deferral than adding to it.”
Australia’s largest bank – The Commonwealth Bank – also reports a decline in the number of home loan repayment deferrals in August 2020, and says exits from loan deferrals have outweighed new entries for the past two months.
Western Australia bouncing back
Western Australia is faring better than most other advanced national economies and is helping soften the economic blow for the rest of Australia.
Despite a lengthy hard lockdown, Western Australia’s economy continues to improve, with the Australian Bureau of Statistics (ABS) reporting 88 per cent of jobs lost in the State due to COVID-19 were recovered by August 22.
The ABS data also showed Western Australia had the lowest number of jobs lost since mid-March at just one per cent, compared to 4.2 per cent nationally.
New opportunities resulting from COVID-19
A recent report highlights some of the trends and advantages that COVID-19 has created for certain industries, and in particular, six Australian industries that could capitalise on the opportunities over the next six to 24 months.
Australia’s national science agency, CSIRO, recently released the COVID-19: Recovery and Resilience Report which outlines opportunities for Australia to leverage science and technology to support economic recovery and resilience.
CSIRO Chief Executive Dr Larry Marshall said, "COVID-19 has disrupted every element of our lives, and while the devastating loss of life can’t be understated, we have an opportunity to determine the new kind of Australia we want to emerge from this crisis.
"Just as science and technology have been guiding our health and emergency response, so too will they drive our economic response and recovery from this pandemic."
The report highlights job creation and investment opportunities for the following sectors:
- Agriculture and food
- Mineral resources
Road to recovery
There’s no doubt Australia has some way to go on its road to recovery, but it’s heartening to see so many positive signs emerging. If you’re still facing serious financial hardship, we urge you to seek help sooner rather than later. Get in touch with the team at Mortgage Express and let’s work together to find a solution.
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