The number of deferred loans in Australia has dropped below 300,000—a reduction of almost 70 per cent since reaching a pandemic peak of more than 900,000 earlier this year.

The lion’s share of deferred loans, 803,000, were with Australia’s seven largest banks.

The new data by the Australian Banking Association shows the value of deferred loans by the seven largest banks has now dropped to $86 billion.

This figure peaked at more than $250 billion in June.

Australian Banking Association chief executive Anna Bligh said the figures were an “encouraging sign”.

“Australian banks have played a major role in carrying the economic burden of the pandemic for their customers.

“The good news is that the majority are now bouncing back as they restart their loan repayments.”

The data shows that to 4 November, home loan deferrals by the seven biggest banks are down to around 145,000, a 67 per cent drop from 436,139 in June.

Total business loan deferrals have fallen to less than 73,000 from 228,070 in June, and SME loan deferrals are down to just over 65,000 from 198,262.

The number of loans on hold is expected to further reduce in coming weeks as more reach the end of their six-month deferral period.

Related: Deferrals Mask Covid’s True Hit On Mortgage Arrears

Meanwhile, the central bank expects the unemployment rate to rise further over the coming months to a little below 8 per cent.

In his Monday policy speech, RBA Governor Philip Lowe said that the unemployment rate is currently at 6.9 per cent, with underemployment even higher.

“In our central scenario, we expect it then to start gradually declining, but still be a little above 6 per cent at the end of 2022,” he said.

The latest ABS figures on wage-price growth show record lows.

Australia’s wage price index rose by 0.1 per cent for the quarter and 1.4 per cent over the year, the weakest growth on record, ANZ senior economist Catherine Birch said.

“We continue to expect annual wage growth to slow into 2021 and real wages to fall,” Birch said.

For the second consecutive quarter, private-sector wages increased by a slight 0.1 per cent for the quarter, to 1.2 per cent for the year.

Public sector wages, which held up better in the second quarter, slowed to 0.2 per cent for the quarter and was 1.8 per cent over the year.