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New South Wales saw the biggest decrease in mortgage delinquencies over the 12 months to May 2015, while most other states and territories experienced increases, according to Moody’s Investors Service.
A report by Moody’s assistant vice president Alena Chen showed that 30-plus days delinquency rates dropped by 29 percentage points in NSW to 1.01 per cent over the period, while Tasmania’s decreased by 12 points to 1.58 per cent.
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The ACT was the only other state or territory to witness a drop in mortgage delinquencies – down 5.0 points to 0.69 per cent.
The Northern Territory experienced the biggest rise in 30-plus delinquency rates over the period – up 18 percentage points to 0.96 per cent – while South Australia’s grew by 16 points to 1.85 per cent.
Mortgage delinquencies in Western Australia rose by 12 points to 1.64 per cent, while Victoria’s rose by 8 points to 1.38 per cent, and Queensland’s rose by 5 points to 1.57 per cent.
Overall, Australia’s 30-plus delinquency rates decreased by 4 percentage points to 1.34 per cent over the 12 months to May.
Ms Chen said the Australia-wide improvement in mortgage delinquencies was largely driven by the significant decline in NSW, reflecting the state’s relatively strong economic activity and rapidly rising property prices in Sydney.
“If the pace of house price growth slows in Sydney, or other areas where the property market has been performing strongly, we could expect mortgage delinquencies to increase over the long term,” she said.
[Related: Investor lending changes insufficient, says Moody's]
