Aussie state topping the list of ‘distress sellings’ revealed

One Australian state is far ahead of all the others when it comes to people forced to sell their homes – termed ‘distress sales’ –  amid mounting cost of living pressures.

Exclusive data by national research firm SQM Research found Queensland had the highest rates of distress listings in the country, with 20,600 in the past year. 

Distress sales are homeowners looking for a quick sale – often for less than the actual value of the home – due to circumstances such as divorce and an inability to pay the mortgage. 

SQM Research founder Louis Christopher told the Courier-Mail that the sunshine state was ‘the worst in the country’ for distress listings.

In June alone, Queensland recorded almost one-third of all the distress sales in Australia – 1,592 out of a total of 5,111. 

Only New South Wales, with 1,300 distress sales, came close, but from a greater  population of 8.4million compared with Queensland’s 5.5million residents. 

In the other states and territories, Victoria had 978 distress sales in June, WA had 757, SA had 221, the NT had 119, Tasmania had 112 and the ACT had 32.

Mr Christopher said Queensland has always had a high number of distress sales, particularly on the Gold Coast, due to many investment properties, plus being a ‘lifestyle’ destination that lures people to buy beyond their means. 

Along with an alarming number of distress sales, more than $900million of Australian mortgages were switched to what are called ‘survival-mode’ home loans in the first quarter of this year. 

Survival-mode is where homeowners only pay the interest due on a mortgage, without paying down the principal. 

One in five mortgage holders reportedly moved to paying interest only in the past two years – a period where Australians have experienced 13 rate rises and paid higher prices on everything from food to power. 

An astonishing $14.6billion worth of Australian home loans were 30 to 89 days past overdue in the March quarter, a rise of 65 per cent.

In further bad news for the Queensland housing market, new research from Finder found that 30 per cent of Queenslanders said they are struggling to pay their mortgage, up from 25 per cent in 2022.

‘Such a large portion of people’s earnings are allocated to their mortgage and spare cash has been extinguished,’ said Richard Whitten, home loans expert at Finder. 

‘A growing number of Aussies are struggling to make their mortgage payments due to cost of living pressures and can’t continue on the path they’re on.’

Finder money expert Sarah Megginson said while paying interest only could be useful as a short-term solution to money problems, it could mean a mortgage costing twice as much in the long run. 

‘It should be viewed as a last resort and a short-term solution,’ she said. 

There could also be at least one more interest rate hike coming this year, with the minutes from the latest Reserve Bank of Australia meeting revealing the board is considering another rise in order to help bring inflation down.

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