Banks give borrowers more hours to repay loans as Melbourne’s renewed lockdown dents share prices
- Melbourne’s new lockdowns have caused Australian share market to lose gains
- Australia’s banks have also extended repayment holidays beyond September
- National Australia Bank is extending repayment pause until March 31, 2021
Melbourne’s new lockdowns have caused the share market to slip amid fears a new coronavirus outbreak will delay Australia’s economy recovery.
The Australian Securities Exchange was on track to finish Tuesday in a stronger position until the last hour of trade, when Victorian Premier Daniel Andrews announced a lot more than five million residents in greater Melbourne and the Mitchell shire to the north will be locked down for six weeks.
The benchmark S&P/ASX200 went from being 0.7 firmer very late in the afternoon to finishing your day 0.03 per cent weaker, as it lost 1.7 points to end the day at 6,012.9.
New South Wales, as of Wednesday, has closed the border to Victoria for the first time considering that the Spanish flu in 1919.
Melbourne ‘s new lockdowns have caused the share market to slip amid fears a brand new coronavirus outbreak will delay Australia’s economy recovery. Pictured are police guarding the entrance to housing commission flats in inner-city Flemington
CMC Markets chief market strategist Michael McCarthy said the Melbourne lockdowns spooked investors, who fear it will jeopardise Australia’s economic recovery from the COVID-19 pandemic.
‘While the support of the government and the Reserve Bank have already been important, the secondary lockdown leaves them with way less options with regards to supporting the economy,’ he told Daily Mail Australia.
‘It’s more than likely this will be very expensive, not just for Victoria but all of Australia.’
IFM chief economist Alex Joiner estimated the Melbourne lockdowns would cost the Victorian economy a lot more than $1billion per week, further delaying the national economic recovery.
‘It’s small businesses, who employ a lot of people, that will need ongoing support most as Victoria locks down and it surely will be incumbent on the government to support those that become dislocated from the labour market,’ he tweeted on Wednesday.
The big four banks had also announced on Tuesday that six-month repayment holidays for borrowers, that were due to result in September, will be extended by at least four months.
Australian Banking Association leader Anna Bligh said borrowers in genuine need might have to ask their bank for an extension instead of assuming it might be automatic.
‘This next phase of bank support will avoid a “cliff” for clients in September and give them the breathing space they require to assist their bank and get right back on their feet financially,’ she said.
New South Wales, as of Wednesday, has closed the border to Victoria for initially since the Spanish flu in 1919. Pictured are police at Albury on the New South Wales-Victorian border ensuring Victorians didn’t cross the Murray River
‘Australia’s banks supported their customers as the country entered the COVID-19 crisis plus they are determined to support their customers in route out of the crisis.’
The ABA estimates that since March 800,000 loans, collectively worth $260million, have been deferred.
National Australia Bank chief executive Ross McEwan said home and business borrowers would be able to extend the pause on their repayments until March 31, 2021.
‘While a significant percentage of businesses and homeowners that individuals have spoken to have started their repayments again, there are plainly still many customers who may need support for a bit longer,’ he said.
National Australia Bank leader Ross McEwan said home and business borrowers will be able to extend the pause on the repayments until March 31, 2021
‘Bankers will speak with clients about their individual circumstances and the choices appropriate for them which may include loan restructure, determining alternative fund sources, hardship assistance or further deferral for up to four months.’
The federal government spent $153.7billion on three stimulus package to tackle the coronavirus downturn, including $70billion for the JobKeeper $1,500 a fourteen days wage subsidies scheme.
The Reserve Bank pumped in yet another $90billion to provide funding to banks to provide cheap business loans.