According to the Standard and Poor’s (S&P) Performance Index, the percentage of prime mortgages more than 30 days in arrears increased to 1.13 per cent in the March quarter, up by more than 7 per cent from the same period a year ago.
“At 1.13 per cent, however, the percentage of mortgages in arrears is relatively low and remains well below the historical peak of 1.69 per cent in 2012,” S&P said.
Loan arrears increased in every state and territory during the quarter, with WA recording the highest percentage at 1.77 per cent, followed by Tasmania (1.51 per cent) and Queensland (1.42 per cent).
S&P noted the high arrears levels partly reflect the tougher economic conditions that these states face.
“Queensland and Tasmania have seen rises in unemployment, and Western Australia is dealing with the ongoing effects of a slowdown in mining investment,” the credit ratings agency said.
“New South Wales and the Australian Capital Territory continued to have the nation’s lowest levels of mortgage stress in Q1, with both below 1 per cent.”
[Related: Loan impairment hits five-year high for CBA]