Where and when will Irish mortgage arrears peak?

The Central Bank has brought out the latest figures on mortgage arrears and they are not pretty. Lets look at the private home mortgages –  As of september 17% of all mortgages are in arrears, that is 135k out of 760k. By value it is 15%. Those over 90 days in arrears, those who are rapidly slipping into total default mode is 86k.  As  a % of total numbers in arrears the over 90 days is now 63% of the total , compared to 40% in september 2009.

This is horrific. When will it end?  If there is any comfort to be taken it is that the rate of increase in arrears has moderated, with a blip in the last quarter. See the chart below

 

mortgage1

 

 

 

 

 

 

 

 

 

 

If we look at the last 4 quarters the quarter-quarter change in the % of mortgages in arrears (either in total or over 90 days) has moderated by about 8% per quarter. If we take the dynamics of the last 4-5 quarters and project them forward we will see the total number of mortgages in arrears peaking only in December 2014 – two full years ahead – at 23% of all mortgage holders.  How long it would take to start to fall is anyones guess….

So – with two more austerity budgets to go, with the number of mortgage holders whose credit history is shot heading for north of 20%, it will be quite some time yet before any corners are turned. While we must sort out the national government finances the mortgage crisis cannot be let fester. What odds the government taking bold radical steps to solve this?

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