%20(wecompress.com).jpg)
Distressed property listings have dropped to their lowest levels since the Reserve Bank of Australia (RBA) began raising interest rate sin early 2022, according to Domain.
Signs of Market Recovery
January 2025 marked the first time all capital cities saw a decline in distressed listings—evidence that households are proving more resilient than expected.
Domain’s Chief of Research, Dr Nicola Powell, says the 2024rebound in home prices played a key role. "Struggling homeowners have been able to sell without major losses," she explains. "Rising prices reduce the risks of mortgage stress."
Fewer Fire Sales
Stronger buyer demand and improved selling conditions mean fewer sellers are being forced into urgent, heavily discounted sales.
“We’re not seeing the ‘must-sell’ listings we saw earlier,” says Powell. “The market is allowing sellers to exit more comfortably.”
That said, mortgage stress hasn’t disappeared—just shifted. Terms like urgent sale and forced sale are less common, but financial pressure still lingers.
A More Balanced Market
Real Estate Chief Economist Nerida Conisbee notes that many distressed homeowners have already sold, creating a more balanced market.
At the same time, new listings spiked in January2025—especially in Sydney, Melbourne, and Canberra—which may reflect ongoing financial strain.
“We’ve passed the peak of rate hikes, but repayments are still biting,” Conisbee says.
Who Felt the Pinch?
First-home buyers and recent upgraders—particularly those who traded apartments for houses—have been most exposed. With limited equity and larger mortgages, they were more vulnerable when rates rose.
Relief on the Horizon?
A possible rate cut later in 2025 could ease the pressure. “Even one cut would offer breathing room,” says Conisbee. “Further reductions could keep distressed listings in check.”
Current Lows by City
Distressed listings are now at their lowest levels since:
· Jan 2022: Canberra
· Apr 2022: Sydney
· May 2022: Melbourne, Brisbane, Adelaide
· Sep 2022: Hobart
If rates fall, we may see a return to pre-2022 stability across the board.
