The nationwide proportion of Australian residential mortgages exceeding 30 days in arrears has risen across all states in Australia year-on-year, according to new data released by Moody’s Investors Service.
According to Moody's latest Mortgage Delinquency Map mortgage delinquencies grew from 1.2 per cent in November 2015 to 1.52 per cent in November 2016.
While a significant portion of the growth in delinquencies could be attributed to the addition of loans under hardship to the calculation methodology, overall instances of arrears had risen irrespective of that reporting adjustment.
Arrears rose in all states and territories over the year to November 2016, with notable standouts in Western Australia, South Australia and the Northern Territory, which all saw record highs.
Specifically, delinquencies were highest in Western Australia and lowest in NSW and ACT.
By contrast, the ACT saw the lowest 30+ delinquency rate, while mortgage performance in NSW was also relatively strong, despite growing 0.09 per cent over the year to November 2016.
The ratings analysts notes that, over the four years to November 2016, NSW arrears declined dramatically – a drop coinciding with the run-up in house prices in Sydney.
It noted that house prices in Sydney grew 18.4 per cent over the year to February 2017, and 13 per cent over the year to November 2016.
Moody's warned that increased levels of arrears could give rise to mortgage defaults, emphasising that these were credit negative for Australian RMBS.
"We expect mortgage delinquencies to continue to increase over 2017," said Moody’s VP and senior analyst Alena Chen, who authored the report.
"Weaker conditions in states reliant on the mining industry, high underemployment, and less favourable housing and income dynamics will drive delinquencies higher," added Ms. Chen.
[Related: Home loan arrears climb 19% year-on-year]