The domestic backdrop continued to tighten through May, with the RBA increasing the cash rate to 4.35%. At the same time, housing conditions became more mixed, with national dwelling values broadly flat through the month and weakness in Sydney and Melbourne offset by continued gains in some smaller capital cities.
This environment keeps borrower resilience in focus. Arrears remain low across the system, supported by employment conditions, borrower equity and conservative lending standards. However, higher rates and cost-of-living pressures are likely to increase dispersion across borrower cohorts over the second half of the year.
For Gryphon, the focus remains on identifying where that dispersion is most likely to emerge. Portfolio surveillance continues to emphasise borrower type, loan vintage, repayment behaviour, collateral quality and geographic exposure, rather than relying on broad market averages.
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