Al-anwar Newspaper English news in Australia
Desperate homeowners slammed by seven consecutive rate rises are being forced to sell up with the number of distressed listings nationwide jumping by more than 15 per cent since May, new research has shown.
Interest rates have risen from a record low of 0.1 per cent to 2.85 per cent in November and some homeowners are struggling to meet mortgage repayments that have risen anywhere between $760 to $1510 a month on average.
The Reserve Bank of Australia pushed through another 0.25 per cent increase to interest rates this week, which could heap further pressure on Australians and force even more to sell up in a hurry.
Queensland saw the biggest rise in the number of properties selling under distressed conditions jumping from 2203 in May to 2791 in October, an increase of 26 per cent or 588 homes, according SQM Research analysis.
Next up was NSW with distressed homes on the market sitting at 912 in May but rising to 1265 an increase of 38 per cent, while in Victoria there were 99 more distressed properties up by 14.9 per cent to 765 homes.
Nationally, the number of distressed properties on the market rose from 5753 in May to 6658 in October, an overall increase of 15 per cent.
Tasmania recorded 14 more properties going to market, while ACT and South Australia had very minor increases.
In the Northern Territory and Western Australia, the number of distressed properties actually dropped in the last six months.
Louis Christopher, managing director of SQM Research, said seven straight rate rises are starting to “bite”.
“As we get more rate rises, the number of distressed properties will rise as more households struggle to keep up with their mortgage repayments,” he told the Australian Financial Review.
However, struggles are being felt more keenly in some capitals such as Brisbane, which has seen a bigger decline in house prices in recent months, with the number of distressed listings jumping up in just four weeks to 1000 properties.
Otherwise Sydney saw distressed listings rise by 3.1 per cent to 564, while in Melbourne they went up by 1.5 per cent to 41 and by 11.2 per cent to 119 in Adelaide. Property listings can hint at a distressed sale with terms such as ‘desperate vendor’ or ‘must sell’ or even more explicitly such as advertising ‘mortgagee in possession’, ‘bank forced sale’ or ‘forced property sale’. Often sellers are forced to accept a lower asking price due to their circumstances, while they could face further challenges as buyers become more cautious and the number of properties on the market rise.
The number of properties sitting on the market for more than six months is also on the rise up by 3.3 per cent in Sydney in October to 4650 homes and 5.9 per cent in Brisbane to 2378 properties. Melbourne has also seen properties going unsold for over six months increase by 1.5 per cent to 7082 and in Perth its up by 4247 to 1.8 per cent.
Rising interest rates and falling house prices will lock some borrowers in with a limited ability to lower their borrowing costs through refinancing but for those stuck in mortgage prison, there might still be ways to cut loan costs, according to Canstar.
