Supreme Court writs on track to double as strapped mortgage holders hit the wall

About 13 homeowners a week are facing repossession of their properties and the latest NSW Supreme Court figures show the number is on track to ­double from previous years.

About 13 homeowners a week are facing repossession of their properties, and the latest NSW Supreme Court figures show the number is on track to ­double from previous years.

When a mortgage holder is unable to make loan repayments, the lender might take possession of the property to sell it and recover the loss. To take back possession of the property, the mortgagee needs to obtain an order from the ­Supreme Court.

The latest court figures for NSW show there have been 346 writs issued for possession in the six months to June 30 this year, compared with 390 issued for the entire 12 months of 2022 and 284 for 2021.

A writ for possession of property is only filed as a last resort, with homeowners usually putting their home on the market themselves.

The latest CoreLogic data appears to suggest more mortgage holders have been selling their homes at a loss rather than trying to keep up with increasing mortgage repayments.

About 13 NSW homeowners a week are facing repossession of their properties.

The proportion of loss-making sales of homes held for less than two years has trebled since late 2021.

In February, the NSW Chief Justice Andrew Bell warned, in a speech to mark the start of the 2023 term, that the courts were bracing for a “very significant” home repossession spike this year following the successive interest rate hikes.

“We unfortunately also anticipate a very significant growth of work in the possession list this year,” Justice Bell told a Law Society of NSW dinner.

In 2020, there were 342 writs issued for possession with 713 in 2019, 531 in 2018 and 466 in 2017. However, the figures are still a far cry from the period following the 2003 property boom and subsequent weakening, when the number of writs being issued was more than 5000.

NSW Chief Justice Andrew Bell. Picture: Supplied

In 2006, most of the 5368 writs ­issued were to families in Sydney's west.

The figures come as the latest banking data shows about 150,000 homeowners are about to switch from fixed low interest rates to the current variable offerings, adding pressure on their ability to pay.

One Sydney property developer – who requested not to be named – claimed most of the distressed sales were occurring in the apartment sector, where owners had obtained mortgages through private lenders at rates significantly higher than those offered by banks.

“I am looking at close to between four and 10 properties being sold a week,” he said.

“There are a lot of distressed sales in the private lending sector. Some are land-banking sites. These are people who may not have been able to get loans from the bank and so chose private lenders whose rates are from 8 to 10 per cent.”

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Originally published as Supreme Court writs on track to double as strapped mortgage holders hit the wall