URGENT UPDATE: Western Australian homeowners are experiencing a significant reduction in mortgage stress as interest rates fall, with the latest reports confirming a dramatic improvement in delinquency rates. Analysis from Moody’s Ratings reveals that the share of WA borrowers falling behind on their mortgages has plummeted from 3.3 percent at the height of the COVID-19 crisis in May 2020 to just 1.28 percent in May 2025.
This remarkable 2 percentage point improvement is attributed to three recent interest rate cuts by the Reserve Bank of Australia (RBA) and a robust job market, allowing homeowners to manage their payments more effectively. The data marks the largest improvement in the country since the pandemic began, highlighting the urgent impact of economic policies on everyday Australians.
According to a briefing note from Moody’s, “Mortgage delinquency rates, which have started to decline in most areas around Australia, are set to continue to go down over the next year as interest rate cuts make home loan repayments more affordable.” This positive trend is further supported by an unemployment rate that has remained low, recorded at 4.1 percent in May and slightly rising to 4.5 percent now.
Analyst Si Chen emphasized, “Australians are in jobs. There’s still economic growth. We don’t have recession fears or risks like America is experiencing.” This strong labor market is crucial for homeowners striving to remain current on their mortgage payments, easing overall mortgage stress across the state.
In addition to improving payment rates, the sentiment in Perth’s property market is exceptionally positive, with Moody’s data indicating house prices have surged approximately 50 percent over the past three years. “With such a strong, buoyant housing market you have a propensity for customers to continue to pay,” Mr. Chen noted, reinforcing the idea that economic conditions are favoring homeowners.
Moreover, recent data tracking civil property repossessions in the Supreme Court indicates that the pressure is easing in WA. Just under 130 applications were lodged with the court in the September quarter, which, despite being an increase from the previous quarter, marks the best September figure since 2020 when foreclosures were largely paused due to the pandemic.
As mortgage stress continues to decline, homeowners and potential buyers alike are encouraged by these developments. The implications of these trends are significant, as they not only enhance individual financial stability but also contribute to a more resilient property market in Western Australia.
Looking ahead, the focus will be on how these economic factors evolve and whether further interest rate adjustments may be on the horizon. Homeowners and investors will be watching closely as the RBA’s measures continue to shape the landscape of the housing market.
Stay tuned for more updates as this story develops.
