CANBERRA, AUSTRALIA - NewsWire Photos - October 10, 2025: Governor of the Reserve Bank of Australia, Michele Bullock appears at the Supplementary Budget Estimates, 2025-26 Economics Legislation Committee at Parliament House in Canberra. Picture: NewsWire / Martin Ollman
UPDATE: A remarkable shift in mortgage stress is unfolding in Western Australia as interest rates fall sharply, providing significant relief to homeowners. New data reveals that the share of borrowers falling behind on mortgage payments has experienced the largest improvement in the country since the pandemic began.
Recent analysis by Moody’s Ratings confirms that mortgage delinquency rates in WA have plummeted to just 1.28% as of May 2025, down from a staggering 3.3% at the height of the COVID-19 crisis in May 2020. This represents a staggering 2 percentage point improvement, indicating a strong recovery in the housing market and financial stability for many families.
The Reserve Bank of Australia (RBA) has implemented three key interest rate cuts, which, along with a robust jobs market, are crucial in easing mortgage pressure for homeowners. A Moody’s briefing note states, “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.”
The unemployment rate, which stood at 4.1% in May and has slightly risen to 4.5%, has played a vital role in helping homeowners stay current with payments. Analyst Si Chen emphasized that “Australians are in jobs. There’s still economic growth. We don’t have recession fears or risks like America is experiencing.”
Perth’s property market sentiment is also on the rise, with Moody’s data indicating that house prices have surged approximately 50% over the past three years. “With such a strong, buoyant housing market, you have a propensity for customers to continue to pay,” Mr. Chen added.
Furthermore, data from the Supreme Court shows that civil property repossessions are also declining. Less than 130 applications were lodged in the September quarter, marking the best September figure since 2020, when banks paused foreclosures due to pandemic-related hardships.
This rapid improvement in mortgage stress is not just a statistic; it reflects the renewed hope and financial stability for countless families across Western Australia. Homeowners are now feeling the relief as economic conditions improve, making it a pivotal moment for the state’s housing market.
As interest rates continue to stabilize, homeowners and potential buyers are encouraged to stay informed on future developments. The ongoing analysis from Moody’s and updates from the RBA will be crucial in understanding the trajectory of mortgage stress and property values in the coming months.
Stay tuned for more updates on this developing story as it impacts the lives of many across the region.
