- Over the past ten years, the LMI industry in Australia has been consistently profitable, operating in a well-capitalised, profitable and stable banking system. Throughout this period, the Australian LMI Market has been supported by consistent GDP growth, sustained credit growth, relatively low unemployment levels and net population growth.
- The Australian banking industry has demonstrated relative strength compared with other global developed markets,1 with the proportion of housing loans impaired or past due below 1% of Australian banks' outstanding housing loan balances in aggregate for each year between 2004 and 2014.2
- Historically, Federal, State and Territory Governments have undertaken initiatives to support the housing industry, particularly for first home buyers.
- HLVR residential mortgage loans are common in Australia and are provided by most Lenders predominantly on a Conforming basis. Australian banks have historically avoided large originations of residential mortgage loans to borrowers who do not meet Lenders' standard lending criteria, including Non-Conforming Loans and Low Doc loans greater than 80% LVR.
- Australian Lenders typically lend money for residential mortgage loans on terms that provide the Lender with Full Recourse in the event of a default. Genworth Australia believes that the Full Recourse nature of most residential mortgage loans reduces the likelihood of loss arising from a borrower's default and also reduces the likelihood of a 'strategic default'.
1. RBA Financial stability review, "The global financial environment", March 2015.
2. RBA Financial stability review, "Household and business balance sheets", March 2015.