iscover
iscover 
The latest report released by SQM Research has revealed that the number of residential properties being sold under distressed conditions rose by 1.3 per cent in September, up from the 5,180 distressed listings recorded in August 2023 to 5,246 in September 2023.
According to the report, the ACT led the rise in distressed selling activity with an increase of 11.1 per cent compared to the previous month, followed by NSW by 4 per cent, Western Australia by 3.6 per cent, and Victoria by 1.5 per cent.
On the other hand, distressed listings decreased in Queensland and South Australia, down by 1.1 per cent and 2.4 per cent, respectively.
Out of the states and territories, Tasmania was the only one to record no monthly change in distressed listings.
On an annual basis, distressed listings have decreased 16.7 per cent from September last year to 2023, led by decreases in Queensland (29.2 per cent), Western Australia (28.7 per cent), South Australia (9 per cent), and NSW (3.2 per cent).
However, Northern Territory, Tasmania, ACT, and Victoria have seen distressed residential property listings increase year on year by 56.8 per cent (NT), 33.3 per cent (Tasmania), 25 per cent (ACT), and 12.2 per cent (Victoria).
National residential property listings overall rose by 9.3 per cent in September to 245,445 dwellings from the 224,530 recorded in August.
According to SQM, the surge in property listings can be attributed to a large rise in new listings across all the nation’s capitals, with Canberra (16 per cent), Sydney (12.2 per cent), and Adelaide (11 per cent) leading the charge.
Managing director of SQM Research, Louis Christopher, said the surge in new listings in September was the “spring selling season living up to its name once more”.
“September was the strongest new listings month since April 2022. It was also the strongest September since 2018,” Mr Christopher said.
“The pick up in new listings is a sign of confidence from vendors that the current market is offering good selling conditions.
“Buyers would also be noticing the increase in choice of stock. However, a note of caution as we also did record a rise in older stock which suggests there are vendors with overly lofty pricing expectations in the market.”
Although there has been an increase in activity throughout the year, Mr Christopher noted that this is “not a boom market by any means”.
Possible signs of borrower distress emerging
The increase in distressed selling activity coincides with the recent Pain & Gain report released by CoreLogic that found the portion of home owners making short-term resales at a loss increased to 9.7 per cent in the June quarter, up from 2.7 per cent in 2022.
These findings came despite Australian home resales increasing for the first time in a year.
CoreLogic head of research and report author Eliza Owen suggested that observing the performance of resales emphasised more pain for recent home buyers within a two-year period.
“Two years is a significant time period because we are two years on from the height of pandemic-related lockdowns, low interest rates, and have just passed the peak of transitions from low fixed rates to high variable rates,” Ms Owen said.
“The portion of homes sold within just two years increased by 1 percentage point to 8.5 per cent over the past year, however the portion of these short-term resales where the seller incurred a loss has increased more substantially, from just 2.7 per cent a year ago to 9.7 per cent in the June quarter.”
[RELATED: Loss-making sales and arrears tick up]
ISCOVER 
