From Moody’s Investor services:
Softening housing market conditions, combined with high household debt, higher interest rates and the conversion of interest-only mortgages to principal and interest repayments, will lead to a moderate increase in delinquencies over the remainder of 2018 and into 2019.
The housing market in NSW and Victoria slowed over the 12 months ending May 2018, following the five-year period from June 2012 to June 2017 of rapid house price growth. A cooling house market can lead to delinquencies, partly because it makes it more difficult for borrowers at risk of arrears to sell their houses quickly to fulfill repayment obligations. NSW and Victoria account for the largest proportions (28.06% and 25.57% respectively) of mortgage loans in our RMBS portfolio.
