More Australians are expected to fail to meet their mortgage repayments this year as the housing sector slows.
Moody's Investors Service, a subsidiary of ratings agency Moody's, says its latest monthly review of mortgages has found the number of Australians who failed to meet their mortgage repayments within 30 days rose to 1.2 per cent in November compared to 1.14 per cent in October.
Moody's assistant vice president Alena Chen says the situation is expected to worsen as the booming housing markets of Sydney and Melbourne slow down.
Ms Chen says this will put pressure on the economy and families and will likely lead to an increase in mortgage delinquencies, the failure to meet payments.
"Strong housing market activity in both Sydney and Melbourne helped foster relatively strong economic performance in the respective states of New South Wales and Victoria in 2015," she said.
"But a slower pace of house price growth will mean a slowdown in economic activity and will contribute to a deterioration in mortgage performance in 2016 from current exceptionally healthy levels."
Moody's said house prices fell by a weighted average of 1.36 per cent across Australia's capital cities, with Sydney and Melbourne falling the most by 2.27 per cent and 1.87 per cent respectively.
It expects the slowdown in the housing market to continue into 2016, particularly in Sydney and Melbourne, as the Australian economy comes under pressure from easing growth in China and declining commodity prices.
