The proportion of Australians who have missed mortgage repayments has hit the highest level in five years.
Moody's Investors Service's latest figures show 1.62 per cent of residential mortgages were more than 30 days in arrears in May, the highest rate in five years, and up from 1.5 per cent a year earlier.
Vice President Alena Chen expects the situation to worsen as the mining downturn continues to dampen economic growth in Western Australia, Queensland and the Northern Territory.
"We expect delinquencies to continue to increase through the remainder of 2017, as weaker conditions in states reliant on the mining industry, high underemployment, and less favourable housing market and income dynamics will continue to drive the rate higher," she said.
Mortgage delinquencies fell in NSW and Victoria and also dropped slightly from record high levels in Tasmania.
Ms Chen said house prices rose by more than 11 per cent in Sydney and Melbourne over the year to May 2017, giving borrowers in arrears, or at risk of falling behind with repayments, the option of selling their properties for a good price.
"However, as house prices continue rising without a corresponding increase in incomes to pay for the more expensive houses, housing affordability decreases and the risk of delinquencies and defaults rises," she said.
ANZ senior economist Daniel Gladwell said a strong level of latent demand will continue to support house prices.
Demand is being created by people forming their own households later in life due to a lack of affordability.
A bank analysis of the latest census figures shows the 'headship ratio' - the share of the population who are the heads of households - has dropped since 2011.
If headship ratios were sustained at 2011 levels, there would be a shortage of 117,000 dwellings in 2017, compared with the actual result of just 21,000.
"The solid level of underlying demand is likely to provide support for house prices," Mr Gladwell said.
On the auction front, last week was the busiest since the end of May, while home prices remained virtually stagnant across the nation.
There were 2,759 auctions across the main capital cities in the week to September 24, up from a revised 2,510 the previous week, preliminary figures from property data group CoreLogic show.
The national capital city auction clearance rate was 70.7 per cent, up from 66.7 per cent in the previous week, but down from 75.4 per cent at the same time a year ago.
CAPITAL CITY PRIVATE TREATY MEDIAN PRICES
Sydney - $926,500
Melbourne - $734,000
Canberra - $639,900
Brisbane - $520,000
Darwin - $510,000
Perth - $510,000
Adelaide - $427,000
Hobart - $400,000
Combined capitals - $700,231
Sydney - $725,000
Melbourne - $543,000
Canberra - $410,000
Perth - $405,000
Brisbane - $375,000
Adelaide - $305,000
Darwin - $385,000
Hobart - $290,500
Combined capitals - $581,796
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