Real estate searches on realestate.com.au suggest an increasing trend among buyers who are actively seeking distressed sales in the hopes of securing a bargain. However, their chances may be limited.

Data from property searches indicates a growing opportunistic mindset among buyers, as they explore distressed listings that sellers want to offload quickly, ideally at a discounted price. Experts note that this reflects a higher interest in finding bargains rather than a substantial rise in the number of sellers in distress.

Notably, searches featuring the keyword “mortgagee” surged by 229% over the year to October on realestate.com.au, making it the 12th most popular search term. This surge was particularly pronounced in Victoria and NSW, with increases of 444% and 376%, respectively.

In other regions, the surge in “mortgagee” searches was significant, with increases of 164% in Queensland, 162% in South Australia, 120% in the ACT, 90% in Western Australia, 72% in Tasmania, and 53% in the NT.

Despite the heightened interest in distressed sales, vendors typically refrain from advertising their sales as distressed or in arrears. This reluctance stems from concerns that such labels could adversely affect their chances of securing the best price for their properties.

However, data reveals that the actual number of lenders taking over properties due to mortgage arrears is minimal. According to Fitch Ratings, the 30+ day mortgage arrears rate for the September quarter only rose to 1.12%. Although property searches featuring the keyword “mortgagee” surged by 229% over the year to October, this may not necessarily correlate with a significant increase in distressed sales.

It’s worth noting that affordability is a key driver of current buyer demand. Mathew Tiller, head of research at LJ Hooker, emphasizes that lower-priced houses, units, and renovation projects are popular among buyers in both capital cities and regional markets. Additionally, the tight rental market is prompting many renters to transition to homeownership, particularly at the lower price points.

Despite the current low levels of distressed sales, buyers, especially investors, are actively searching for bargains. Investor activity is on the rise, with a 5% increase in investor loans in October 2023 compared to the previous month, marking a 12.1% increase from the same period a year ago.