Rising Mortgage Hardship Reveals Concerning Trend in Australian Housing Market

Recent data from the Australian Securities and Investments Commission (ASIC) has unveiled a troubling trend in the country’s housing market, with a significant number of properties being resold within a short period due to mortgage hardship.

A record 16% of property sales in Australia involve homes changing hands within three years, indicating a growing trend of rapid resales driven by financial strain. ASIC’s report highlights a staggering 54% increase in mortgage hardship notices lodged by banks in the last quarter of 2023 compared to the same period in 2022.

Criticism has been directed towards banks for potentially over-lending to customers, resulting in financial distress and hardship. However, despite the surge in mortgage hardship cases, distressed property sales remain low due to the buoyant property market, with rising prices and seller reluctance to disclose desperation.

This situation underscores the urgent need for regulatory scrutiny and potential policy changes to address lending practices and ensure financial stability in the housing market. As homeowners continue to grapple with mortgage pressures, attention to these issues becomes increasingly vital for the well-being of both individuals and the broader economy.