Distressed listings: 20,000 Qld families forced to sell homes

Queensland is “the worst in the country” for distress listings with more than 20,000 families forced into selling up.

• Full list: Your home’s worth in 2029

More than 20,000 Queensland families have been forced to sell their homes in distress sales in the past year, with ‘survival-mode’ interest only home loans rising almost $1bn nationally in three months to fight off delinquency.

Exclusive data by national research firm SQM Research revealed Queensland recorded the highest rates of distress listings in the nation amid mounting financial pressures of 13 rate hikes and worsening cost of living pressures.

It comes as the value of Australian home loans 30 to 89 days past due rose 65 per cent to $14.6 billion in the March quarter.

New research from Finder shows thirty per cent of Queenslanders said they are struggling to pay their mortgage, up from 25 per cent in 2022.

The survey also found more than 20 per cent of mortgage holders had switched to interest only payments in the past two years in “a last-ditch effort to avoid delinquency”.

SQM Research founder Louis Christopher said Queensland was “the worst in the country” for distress listings, recording 20,600 in the year to June 30, ahead of New South Wales which recorded 15,200 in the same period.

SQM Research head Louis Christopher said Queensland topped the nation for distress listings.

MORE:

Huge $1.5bn waterfront project approved for 200 homes, hotel

Home price surges to push more families two hours out of town

Distress listings are properties that generally hit the market under value due to forced circumstances including mortgagee repossession, rushed sales and divorcee sales.

And there are fears homeowners could soon be slugged with further interest rate hikes, with minutes from the latest Reserve Bank of Australia meeting revealing the board is prepared to raise rates to rein in inflation.

Richard Whitten, home loans expert at Finder, said millions of Australian households were in survival mode amid the cost of living crisis.

“Such a large portion of people’s earnings are allocated to their mortgage and spare cash has been extinguished,” he said.

“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.”

SQM Research head Mr Christopher said Queensland has always been the hottest zone nationally for distress sales, with the Gold Coast’s transient population playing a major role.

More than $900 million dollars’ worth of Australian mortgages were switched to ‘survival-mode’ interest only loans in the first quarter of 2024 and one in five homeowners reported making the move to interest only in the past two years.

Finder money expert Sarah Megginson said interest only loans were a short-term solution that if prolonged could see homeowners paying much more.

See the latest PropTrack Home Price Index

Finder money expert Sarah Megginson said paying interest only was “okay as a short-term solution to your budget woes” but it did not allow families to make progress on their loan principal.

“Whatever savings you make to your cashflow now, you could end up paying twice that much in the long run,” she warned.

“Some people are in dire financial positions at the moment and for those borrowers, an interest only loan is a really viable option to help them keep their head above water until rates start to come down or their financial situation changes.

“But it should be viewed as a last resort and a short-term solution.”

FOLLOW SOPHIE FOSTER

Originally published as Distressed listings: 20,000 Qld families forced to sell homes