Moody's: Australian residential mortgage delinquencies lowest since 2006, but some mining regions deteriorate

Moody's Investors Service says that Australian residential mortgage delinquencies are at their lowest level since 2006, due to record-low interest rates, rising house prices and a relatively steady macro-economic environment.

Mortgage delinquency rates improved in Sydney -where house prices are rising rapidly- but deteriorated in some mining regions against a backdrop of steep commodity price declines for Australia's resources sector.

Moody's analysis is contained in the latest edition of its semi-annual report "Australian Residential Mortgage Delinquency Map: Delinquencies at Lowest Since 2006, But Some Mining Regions Deteriorate," authored by Alena Chen, a Moody's Assistant Vice President.

The report analyses mortgage delinquency trends based on states, regions, and postcodes.

As of 30 November 2014, 1.19% of residential mortgages were more than 30 days in arrears, less than the 1.24% at the end of November 2013, says Moody's. Mortgage delinquencies are now at their lowest level since the 1.03% level in 2006.

"We expect stable mortgage performance for the rest of 2015, with delinquencies remaining low," says Chen. "Australia's low interest rate environment, strong house price appreciation and steady macro-economic environment are a supportive backdrop for mortgage borrowers."

Performance varies across regions, says the rating agency. Sydney accounts for five of the best 10 regions in Australia, and features heavily on the list of best postcodes.

New South Wales and the Northern Territory were the biggest improvers over the 12 months to November 2014. The Northern Territory and the Australia Capital Territory had the lowest delinquencies in the country.

However, regions exposed to the mining industry recorded the biggest delinquencies. Some regions-including Mackay and Queensland Outback-have reversed their positive trends of only a few years ago, and now show some of the highest delinquencies.

Moody's subscribers can access the report at http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_1003803