Distressed

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EXPERT OBSERVER
A comparatively low number of mortgagee sales hints at positivity for the property market, however, levels of home owner distress may be revealed in coming months.
Meanwhile, demand for homes outside of capital cities continues to soar as buyers search for property in regional Australia.
No signs of distress a positive for property
There are many levels of distress in property markets but one of the most extreme circumstances is when the bank takes ownership of your home and it becomes a mortgagee sale. Positively, the number of mortgagee sales is currently very low (only five listed on realestate.com.au) and they are in fact lower than at the same time last year.
The biggest decline in mortgagee sales has surprisingly been for apartments. Although we are seeing rising listings in areas with large numbers of apartments, those listings aren’t mortgagee sales. While this is good news on the surface, some owners may be in challenging situations but just haven’t moved to the highest level of distress yet.
It’s worth noting that although we haven’t seen high levels of distress yet, we may start to see this increase in the coming months. The mortgage payment freezes being offered by many banks will come to an end and unemployment doesn’t look like it is going to rapidly decrease any time soon.
More positively, banks are still well capitalised and are more likely to work with home owners under stress rather than take possession of their homes. We are also not seeing rapid declines in house prices so that will help ensure that home owners aren’t left with a bigger loan than the house is worth if they need to sell.
<img src="https://www.urban.com.au/images/2020/7/5/REA%20mortgagee.JPG" alt="">
NERIDA CONISBEE is the Chief Economist at the REA
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Low number of distressed property sales, for now at least: REA's Nerida Conisbee

Limited signs of distress in commercial property so far: REA's Nerida Conisbee

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Thornlie, a large outer suburb of Perth, has been ranked as the suburb with the most distressed listings in Western Australia.
Following Lalor Park, Thornlie has been ranked nation's second most distressed suburb across Australia, according to Investar. 
It suggests postcode 6108 has many discount listings.
Its house listings are typically for sale for 217 days.
The suburb's median house price sits at $348,000, which has dropped 15% over the past year.
Its median rent sits at $320%, with no growth over the past year.
The rental yield sits at 4.8%. 
Thornlie is the largest suburb within the City of Gosnells.
Established during the post-war years, significant growth didn't occur until the late 1950s and lasted through to the 1980s.
A slight population increase was experienced during the 1990s, but since has remained relatively stable.
<a href="https://www.realestate.com.au/sold/property-house-wa-thornlie-125380630" target="_blank">A recent mortgagee sale</a> (pictured above) took 310 days before its $390,000 sale.
It was initially listed with $500,000 hopes. 
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Distressed

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