Distressed NSW home sellers are breaking even despite downturn, data shows

New data has painted a surprising picture of those needing to sell during the downturn as affordability hits hard and cost of living pressures mount.

Borrowers struggling to afford homes purchased when interest rates were at record lows are managing to break even or turn a profit when selling, despite prices falling since March last year.

Data provided exclusively by Suburbtrends shows the vast majority of those who recently sold after purchasing in 2020 and 2021 when the cash rate was just 0.1 per cent are doing so without recording a loss, with some even raking in a profit.

It comes despite many of the suburbs with the highest levels of relistings recording negative growth over the past 12 months as the cash rate surged to 3.35 per cent.

Suburbtrends ranked the top 20 suburbs in NSW with the highest level of relistings by taking a snapshot of properties that had sold in the last three months and counting how many had traded within the three years prior.

Sisters Stephanie (left) and Katherine Todd sold their Wahroonga house just 20 months after purchase. Picture: Sam Ruttyn

Regional areas such as Port Macquarie, Goulburn and Orange had a high level of relistings as did the Sydney suburbs of Manly, Liverpool and Parramatta.

A closer look at the data reveals hundreds of properties sold in November or December last year for a higher or equal price than when they were purchased in 2020 or 2021 despite home values falling in Sydney for the nine months prior.

Director Kent Lardner said while a portion of the relistings were considered “fix and flip” projects, the majority were driven by the need to sell, which in turn, was driven by affordability.

He said the rising cost of loan repayments alongside soaring inflation was putting pressure on households that borrowed when interest rates were low.

“All the evidence points to rises in living costs and rises in interest rates – there may be a bit of fear and anxiety mixed in with that,” Mr Lardner said.

He said buyers typically held a property for about 11 years before reselling, while most professional home flippers would be reluctant to sell in a downturn.

MORE: Fears of fixed rate cliff grow after RBA move

Sydney real estate market ‘close to bottoming out’

SQM Research director Louis Christopher said a lot of property owners were holding back on their plans to sell.

SQM data shows distressed listings surged 49.6 per cent in NSW since January last year but overall new listings declined 20 per cent, representing a significant drop in housing for sale.

“There are very few forced sellers out there as our distressed listings index reveals, which indicates, thus far, a market under no great stress,” Mr Christopher said.

Mr Lardner said while those forced to sell after purchasing in Sydney a year ago at the peak would “be in strife,” those who purchased at least two years ago were more likely to cover their closing costs thanks to a lack of supply and an “even spread” of relistings across Sydney.

“Most of these markets are actually in good shape,” he said.

“A lot have already had their 12 months of decline, so they’re starting to move into that stabilising period.”

“There’s also an undersupply that has propped things up.”

Farha Diba from Raine & Horne Ingleburn said there were a lot of buyers waiting to pounce.

She sold 190 Cumberland Rd in November 2022 for $905,000 after the vendors had paid $777,500 just 19 months prior.

There had been no renovations done to the Ingleburn home in that time.

“As long as the property looks good, is ready to move into and is in a good location there is demand for it,” Ms Diba said.

Sisters Katherine and Stephanie Todd made a profit of $174,000 before closing costs after they decided to list their Wahroonga house for sale in November last year.

This Ingleburn house sold for $905,000 in November 2022 after selling in April 2021 for $777,500.

The first home buyers had purchased it together in March 2021 for $1.566m when interest rates were at an all time low, but were becoming concerned about how high their loan repayments would soar once their fixed rate term expired.

“We had figured out how high we could go up to, but being first home buyers, hadn’t factored in a lot of the maintenance costs of owning a property,” Ms Todd (Katherine) said.

Selling agent Bronwen Lipscombe from McGrath Wahroonga said strong demand from prospective buyers gave her the confidence to take it through to auction where it sold over expectation for $1.74m.

“The timing was good. We didn’t have a lot of properties on the market and there was certainly an appetite from that first homebuyer segment,” Ms Lipscombe said.

Ms Todd said they were happy with the result.

“We have been saying to ourselves in the last couple of months how glad we are that we sold when we did,” she said.

“It’s meant we can do things, like travel, that we wouldn’t have been able to do if we hadn’t sold.”

MORE: Mr Untouchable: the man rate hikes can’t hurt

How you may be sabotaging your family wealth

Your rent horror story could be in Slumlord video game