Genworth sees further housing market moderation

The mortgage lender insurer Genworth says the housing market is likely to continue to moderate.

It came as its first-half profit more than halved.

Total portfolio delinquencies only rose 0.3% to $7.3 million, while the portfolio delinquency rate rose just 0.03% to 0.54%.

Genworth, which provides insurance to lenders against the risk of borrowers defaulting, posted a $41.9 million profit for the six months to June, down 52.8% on the same period a year earlier.

Genworth said it expected the moderating trend to continue in the second half of the year, due to macro-prudential measures, tightening credit standards and record levels of new housing supply coming onto the market.

“Metropolitan housing markets in Sydney and Melbourne are predicted to lead the trend whilst the rate of ­decline in regions linked to the mining resource industry in Queensland and Western Australia, is expected to stabilise,” chief executive Georgette Nicholas said.

The company said it was making progress as it looked to evolve in the face of changing borrower and lender expectations, resulting from technology and regulatory change.

“Our first-half results are in line with our guidance and reflect the fact that 2018 will be a transitionary year as the impact of our 2017 annual premium earning pattern review is felt and we continue to implement strategic initiatives designed to redefine our core business model and diversify our revenue streams,” Nicholas said.