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���������ֳ�’s Australian Asset Performance Outlook: Deteriorating The central bank’s 4.25 percentage points of cash rate hikes between May 2022 and November 2023 and high levels of inflation continue to squeeze borrower finances and are likely to continue upward pressure on arrears and defaults in 1H24, pushing conforming RMBS arrears back up and past pre-Covid-19 levels. Deterioration is likely to be mild and will peak around mid-year, before moderating in the second half on sustained low employment, disinflation and potential rate cuts. House prices have risen throughout 2023, offsetting the declines experienced in 2022 after interest rates starting increasing. ���������ֳ� forecasts home prices across Australia to continue to increase in 2024, albeit at a slower pace with national increases of 4% to 6% in 2024 as limited supply and high net migration continue to support property price growth. We expect used-car prices to remain above pre-pandemic levels, aiding recovery performance for auto ABS. ���������ֳ�’s New Zealand Asset Performance Outlook: Deteriorating ���������ֳ� projects arrears and defaults to increase in 2024, driven by rising unemployment and a cash rate that is likely to remain at its highest level since December 2008, reducing borrowers’ ability to service debt. The New Zealand property market experienced a sharper and longer decline than Australia, with prices falling over 14% between December 2021 and June 2023.