Mortgage arrears have risen nationwide to three-year highs—with Tasmania, the Northern Territory, and Western Australia experiencing the biggest increases. The figures, which come from bond credit rating agency Moody’s, placed the national rate of delinquent mortgages (those at least 30 days behind on repayments) at 1.5%, up 0.16% over the past year to May 31.

Despite a one-percentage-point reduction in the official cash rate over the past three years, mortgage delinquencies are nearly back to 1.59%, a figure last recorded in April 2013. Rather worryingly, mortgage delinquencies have increased over the past year in every state and territory—even those with relatively robust economies, such as Victoria and New South Wales.

Mortgage delinquencies are far more severe in economically weaker areas, such as Western Australia, the Northern Territory, and Tasmania. These three areas recorded mortgage arrears that haven’t been equaled since 2005, before the GFC and pre-crisis peak in the Reserve Bank of Australia’s cash rate of 7.25%.  

Western Australia’s mortgage delinquency rate was by far the worst at 2.33%, up nearly 0.7% since 2015. Moody’s blamed falling house prices (which often prevented people from selling their homes to avoid mortgage delinquency), higher unemployment, underemployment greater than the national average, and a 1.6% fall in average weekly wages over the past year for Western Australia’s mortgage problem.   

Moody’s forecasted that the rate of Aussies grappling with housing debt will continue to rise “moderately” for the rest of 2016. "Lower commodity prices and the associated slowdown in mining and mining-related sectors will continue to weigh on GDP growth and therefore mortgage performance,” the agency said.