Distressed listings rise 29% while asking prices begin to soften
The number of distressed properties listed for sale across Australia reached 4,872 in September, an 8% rise on August and 29.2% more than a year earlier, according to SQM Research.
The increase was spread across most states. The Australian Capital Territory (ACT) recorded the steepest annual rise, up 93.9% off a low base, followed by South Australia at 91.1%, while Western Australia was up 64.3% and Queensland 47.5%. Queensland now carries the most distressed listings of any state, at 1,655. Victoria was broadly flat on a year ago, and Tasmania was 21% lower.
SQM Research managing director Louis Christopher (pictured) said distressed stock was the key indicator the firm was tracking.
"In absolute terms the numbers remain relatively contained, but the trend is clearly upward," Christopher said.
SQM noted the rise does not in itself point to widespread mortgage distress, and the Reserve Bank's latest Financial Stability Review found mortgage arrears have edged higher but remain near pre-pandemic levels.
Unsold stock, not new supply, drives the build-up
Total national listings climbed 2.6% over the month to 276,839 dwellings, 21.6% above September 2025. New listings lifted 8.7% as vendors returned for spring, but most of the annual increase came from properties that had been on the market for one to six months without selling.
Sydney shows the pattern clearly. New listings there are 9.4% below a year ago, yet total stock is up 19.3%.
"That's a demand problem, not a supply surge," Christopher said.
Separate Cotality figures show capital city homes are now taking a median 39 days to sell, up from 23 days a year ago.
Brisbane and Adelaide lead the capitals
Brisbane recorded the sharpest annual rise in total listings of any capital, up 43.5% to 21,153. Adelaide followed at 39.5%, and Melbourne, which still holds the most stock at 49,341 dwellings, was up 30.3%.
"Buyers in these markets have significantly more choice and, in turn, more negotiating power," Christopher said.
Perth posted the largest monthly increase among the capitals at 4.5%, while Hobart was the only capital with fewer listings than a year ago, down 3.1%.
Asking prices begin to soften
SQM's weekly asking price index for the week ending 29 September showed national combined asking prices down 0.4% over the month, though still 3.6% higher than a year earlier.
Brisbane recorded the largest monthly fall among the capitals at 2.1%, followed by Perth (1.1%) and Adelaide (1%). Darwin posted the strongest annual growth of any capital at 10.1%.
How vendors respond over the rest of spring will be an important signal for the market heading into 2027, according to Christopher.
