Most NSW home owners remain on top of their mortgage repayments despite skyrocketing Sydney house prices, ratings agency Moody's says.
The proportion of mortgages more than 30 days behind on repayments in NSW was at an historically low 0.94 per cent as of November 2016, up marginally from 0.85 per cent a year earlier, Moody's latest delinquency report shows.
Mortgage delinquencies in the state have fallen from 2.02 per cent in 2011, as median Sydney house prices have skyrocketed, almost doubling since 2011 and up more than 18 per cent in just the last 12 months.
But delinquencies across the country, particularly in mining states, are expected to rise in 2017 amid high underemployment, rising household debt and slow wages growth.
House prices across Australia rose by an average of 30 per cent over the three years to February 2017, while average weekly earnings grew by just 4.4 per cent.
Western Australia had the country's highest delinquency rate of 2.76 at November, driven by poorer economic and housing market conditions.
Delinquencies in the Northern Territory and South Australia hit record highs of 2.23 per cent and 2.16 per cent, respectively.
The proportion of Victorian borrowers behind on repayments increased to 1.43 per cent, a relatively low rate.
As in NSW, rising house prices and strong economic and job market conditions supported mortgage performance, Moody's said, with at-risk borrowers able to sell quickly and for a good price.
But Moody's said the risk of delinquencies and defaults will rise if house prices increase without corresponding wages growth.