DISTRESSED property sales starting to dry up.
Source: News Limited

IMPROVED market conditions since the end of the Global Financial Crisis means distressed property sales are starting to dry up.

While there are still 11,437 distressed properties listed for sale nationally, according to new analysis from SQM Research that only equates to 3.3 per cent of what is being advertised for sale.

More than 96 per cent of properties advertised now are listed as “normal’’ transactions.

Victoria was the best performer with only 1.4 per cent of its market a distressed listing.

The Queensland market was behind most other states with 5812 or 6.5 per cent of the market being offered under “distressed” conditions.

All of the top six regions for distressed listings were in south east Queensland with five of those on the Gold Coast and one on the Sunshine Coast.

SQM Research managing director Louis Christopher said if he had run these figures a couple of years ago the number of distressed sales would have been a lot higher.

His analysis considered a sale to be distressed when a property was advertised as;

— mortgagee in possession, bank forced sale or liquidation event.

— selling below valuation, cost or last sold price.

— heavily reduced or bargain conditions

— divorce sale, deceased estate, illness conditions

— requirement for immediate sale conditions

While the actual number of distressed properties advertised for sale in the Northern Territory was low, 55, it equated to 3 per cent of that market.

In terms of the number of distressed properties being offered for sale, New South Wales, was second on the list (2046) properties, followed by Victoria (1310) and Western Australia (1245).

The Gold Coast (1156) had more distressed properties listed for sale than the whole of South Australia (662), Tasmania (258) and The ACT (49) combined.

Mr Christopher said we are at the “tail end’’ of distressed selling, but he warned that any significant upward change in interest rates would tip that balance.