The Real Estate Institute of Australia (REIA) has welcomed an announcement by the Australian Banking Association to implement a new phase of support to assist customers, as the six-month loan repayment deferral period draws to an end.
Australia’s banks will now extend loan deferrals for another four months for customers who have been impacted by the COVID-19 pandemic, with creditors fearing the “September cliff”.
The new extension will be processed on a case-by-case basis depending on individual circumstances, with the banks expecting those who are able to resume repayments to start doing so by the end of their six-month deferral in September.
The additional deferral will also have no impact on a customer’s credit report or their credit rating.
Australian Banking Association chief executive Anna Bligh said over 800,000 people had now deferred over $260 billion worth of loans since repayment holidays were rolled out back in March.
“This next phase of bank support will avoid a ‘cliff’ for customers in September and give them the breathing space they need to work with their bank and get back on their feet financially,” Ms Bligh said.
REIA president Adrian Kelly welcomes the banks supporting Australian mortgage holders.
“Supporting home owners during this phase where they may be finding it difficult to continue paying their mortgage is to be applauded,” Mr Kelly said.
Mr Kelly believes it is a win-win, with landlords who are supported being able to help tenants who are impacted by COVID-19.
“As the September deadline draws nearer, the banks have made a sensible decision to give home owners a bit more breathing space, for those who need it, to work with the banks and get them on their feet financially.
“The government will need to consider further rent subsidies post-September in order to ensure that tenants who have lost employment are not evicted.”
Mr Kelly noted the critical role property has played in growing the national economy over the last three years.
“For this, the banking industry is to be commended for their continuing support of current home owners, landlords and tenants. It is hoped the government will also consider a stimulus to the sector to boost expected low levels of unemployment and address growth in the Australian economy,” Mr Kelly concluded.