The number of Australian residential mortgages that are more than 30 days in arrears has climbed to a five-year high, according to ratings agency Moody’s Investors Service.
Moody’s recorded a 30+ delinquency rate of 1.62% in May, with record high rates in Western Australia, the Northern Territory, and South Australia. Arrears have also risen in Queensland and the ACT, while arrears decreased in NSW, Victoria, and Tasmania.
“We expect delinquencies to continue to increase through the remainder of 2017, as weaker conditions in states reliant on the mining industry, high underemployment, and less favourable housing market and income dynamics will continue to drive the rate higher,” said Alena Chen, vice president and senior analyst at Moody’s.
Eight of the 10 regions with the highest 30+ day delinquency rates are located in Western Australia and Queensland, and are locales either directly or indirectly related to mining and resources.
“The mining downturn has dampened economic growth in resource-reliant states, such as Western Australia, the Northern Territory and Queensland, and we expect this situation will weigh on mortgage performance for some time,” Chen said.