Reportedly, up to one-fifth of listed properties in certain areas of Brisbane and Sydney are classified as distressed sales, marking a significant rise and indicating potential economic distress.

Meanwhile, the overall proportion of distressed properties in the capital cities has dropped to its lowest level in recent years. However, according to observations from Oliver, Chief Economist at AMP, if interest rates remain at current levels, the number of distressed sales and loan defaults may rapidly escalate in the coming months.

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He warns that although most homeowners are currently able to maintain mortgage payments, the continued rise in unemployment rates will lead to a persistent increase in delinquency rates and distressed property numbers as low-income households gradually deplete their savings buffers.

In Sunnybank, located 16 kilometers southeast of Brisbane's CBD, 20% of properties listed for sale in January were classified as distressed sales, marking a 5.2 percentage point increase compared to the same period last year. Similar situations have also arisen in areas like Rocklea-Acacia Ridge and Nerang on the Gold Coast, reflecting the pervasiveness of this trend. In Sydney, areas such as Blacktown and Merrylands-Guildford have also seen an increase in distressed property proportions, reflecting the challenges facing certain areas of the real estate market.

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Experts point out that many distressed sales are coming from individuals who are struggling to repay their loans after fixed-rate mortgages expire, particularly as interest rates rise and persistent high inflation place greater pressure on household budgets.

Buyer agent Solano from Hot Property Buyers Agency agrees with this viewpoint. Additionally, data from SQM Research shows a significant increase in distressed sales in suburbs like Carlingford, Kellyville, and Westmead in Sydney, further highlighting the market's instability.