The latest APRA statistics have revealed a surprising shift in COVID-related loan deferrals, indicating small businesses around the country are beginning to recover from the crisis.
APRA’s loan deferral statistics for November 2020 showed the number of small businesses on loan deferral fell below the number of deferred housing loans for the first time since the pandemic began, with just 2.4 per cent of all SME loans now being on deferral.
Just $7.6 billion of SME loans remained on deferral across all authorised deposit-taking institutions, out of the $322 billion total SME loan pool. This compared to deferred housing loans, which accounted for $49.5 billion – or 2.8 per cent – of the $1.8 trillion total housing loan pool.
More than 35 per cent of all housing loans on deferral were coming from investors, with around 15 per cent of deferred housing loans being interest only.
The statistics indicated both households and businesses continued to recover financially from the pandemic, with $32 billion in loans exiting deferral compared to $7 billion entering or being extended in November. This is the fifth consecutive month that deferral exits have outweighed entries or extensions.
Total loans on deferral also declined significantly in November to 2.3 per cent nationwide, compared to October where the number was closer to 4 per cent.
However, the effects of the prolonged lockdown in Victoria continued to be felt with 3.2 per cent of total loans in Victoria still being on deferral, compared to 1.7 per cent for the rest of the country.
Victoria also had the highest number of housing loans on deferral at around 8 per cent, while the Northern Territory had the highest number of SME deferred loans at around 12 per cent.