Repossession orders are up while default rates seem to be lower than ever
 A recent report from the Australian Supreme Court citing a significant rise in orders for property repossessions has prompted the Australian Prudential Regulation Authority (APRA) to voice new concerns about the current state of high risk lending. Per the Supreme Court calculations, repossession orders were levied against over 4000 homeowners, up from 3061 in 2004. Despite these reports, The Reserve Bank actually claims that default levels on bank originated mortgage loans are actually at a record low in comparison to statistics noted in the last decade. One potential reason provided for this conflicting data is that while bank loans are showing very low levels of default, the occurrence of defaults on loans originated by non-bank lenders (e.g. Non - Conforming loans) is up to ten times higher.

Issues behind the statistics
Financial experts have several explanations for the rise in consumer defaults including lowered credit standards for mortgage approval and an increase in the amount of money people are choosing to borrow. As always, consumers are advised to use caution when borrowing  against their home and taking advantage of low interest rates to purchase properties that they may not be able to afford. Additionally, rising land taxes that have been spurred by an increase in land value–particularly on non-primary residences valued over $300,000—are causing cash-flow problems for some investors.

Avoiding home loan defaults
On a positive note, along with the report, the Supreme Court also conceded that not all orders for repossession resulted in home seizures. Frequently, banks and lending companies will negotiate with the borrower to resolve the problem before escalating to an actual eviction. Homeowners can avoid defaults by carefully considering which mortgage is the best for their situation, understanding interest rates dynamics and by staying within their budget when borrowing money for their home.