Mortgage Pressure Pushes More Homeowners to Sell
An increasing number of homeowners in outer suburbs are preparing to sell their properties this spring, as rising mortgage stress impacts many. The number of property listings has notably increased in several areas compared to the previous five-year average.
In outer Melbourne, property listings have surged. In Sunbury, listings are up by 90.6 percent, and in the Melton/Bacchus Marsh area, they have risen by 58.2 percent, according to CoreLogic data. Similarly, in Sydney, listings in Rouse Hill/McGraths Hill have increased by 48.6 percent, while the Blacktown North area saw a 24 percent rise.
Eliza Owen, Head of Australian Research at CoreLogic, suggested several factors could be contributing to this trend. One reason could be new developments in these areas, leading to more properties on the market than in previous years. However, Owen also pointed to rising mortgage stress as a significant factor, with some homeowners needing to sell due to difficulties in managing higher mortgage payments.
Owen noted that areas with an oversupply of properties compared to historical averages are experiencing slower sales. This oversupply means buyers have more choices, which can drive prices down. She advised sellers to carefully assess the market before deciding to sell, as it might be more advantageous to wait for a period of lower competition.
The rise in home listings is partially attributed to the pressure of increasing interest rates on homeowners. AMP Chief Economist Dr. Shane Oliver observed that the increase in listings from areas with high mortgage stress suggests that some homeowners are opting to sell while property values are still relatively high, in order to reduce their mortgage burden.
Oliver indicated that while many homeowners have managed to cope with rising rates by drawing on savings or seeking support from family, the prolonged period of high interest rates could lead to more distressed sales. Despite this, he reassured that the current situation does not signal an imminent housing market crash.
Westpac Senior Economist Matthew Hassan acknowledged the rising mortgage stress but emphasized that it remains within historically normal levels. He noted that while some areas are experiencing increased listings, this may also reflect other factors such as people upgrading their homes or changes in personal circumstances.
Hassan also pointed out that the timing of property sales can vary significantly by market. In Melbourne, for example, it might not be the ideal time to sell due to current market conditions, leading some homeowners to sell out of urgency.
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