National housing repossession data is hard to come by.
More households in Victoria and New South Wales are being forced to sell their homes as the economic slowdown puts mortgage repayments beyond their reach.
So-called foreclosure proceedings in Victoria and New South Wales are on track to reach their highest levels since the depths of the global financial crisis.
The number of repossessions of land cases lodged in Victoria's Supreme Court has risen to 1696 in the 10 months to April this year. If the pace is maintained, the tally will reach about 2035 for the 2011-12 year.
That total would be the most since 2008-9, when the GFC raged and sent the tally in Victoria to 3080. There 1790 such cases lodged in 2010-11.
“I am noticing some increases, that's for sure," said Geelong-based John Kovacs, managing director of NMD Data, which compiles listings of distressed properties. “There's a lot of pain out there."
National figures on repossessions are hard to come by. Still, the trend adds to other evidence that the housing market is heading lower in most capitals even as interest rates slide.
The trend in Victoria is showing up in NSW, the most populous state. Filings with the NSW Supreme Court show repossession have risen to 2955 cases in the nine months to March 2012.
At that rate, the tally will reach about 3940 in 2011-12, up marginally from 3848 cases in 2010-11, data from the court showed. In 2008-9, during the GFC, the total number of repossessions lodged was 5749 in NSW.
House prices
The steeper rise in foreclosures in Victoria may be a symptom of the state's weaker economy, prompting house prices to retreat and sinking more households into so-called "negative equity" where the premises is worth less than their mortgage.
House prices in Melbourne slid 6.6 per cent in the year to March 2012, according to official Australian Bureau of Statistic data, following a rapid increase in stock in recent years.
In Sydney, where planning constraints have long stymied the market's growth, house prices posted a more modest 4.6 per cent fall for the period.
The falling home prices and recent cuts in interest rates, however, are helping to improve housing affordability.
The Housing Industry Association-Commonwealth Bank housing affordability index, released this week, gained 6.4 per cent in the March quarter to a reading of 61.8 from 58.1 in the December quarter. The March quarter reading was the fifth straight quarter of improvements.
Hard data
The lack of national data on housing repossessions, though, makes it difficult to know the true state of the national market, NMD Data's Mr Kovacs said.
Major banks are also reluctant to advertise properties as "mortgagee repossessions" because such declarations typically result in lower prices from the resulting sale, he said.
On average for the past three years, there has been about 400,000 properties sold each year, said Mr Kovacs. “Of which, the big question is, how many are mortgagee repossessions?"
Both the Australian Prudential Regulation Authority and the Reserve Bank of Australia reportedly track the number of mortgages foreclosed on by banks.
Yet neither organisation discloses them to the public. The ABS says it doesn't compile figures on repossessions nor does private real estate data group RP Data.
Bad or just ok?
Hence, Mr Kovacs says it is impossible to know whether the mortgage market is “really bad or just okay.”
“When you get the real estate industry fudging figures and you get banks doing the same, well, what's real and what isn't?”
Economist blogger Leith van Onselen said centralised national foreclosure or repossession data "is almost impossible to get and we're reliant on the odd RBA speech to give the colour,”
“It's one of the areas where we are lacking big time,” Mr Onselen said.
"The authorities would argue they don't want to shatter confidence in the system [by publishing them]," he said.
NMD Data's Mr Kovacs said swelling foreclosures represent an opportunity for buyers.
“If you're a buyer and happened to be cashed up and ready to settle quickly, then you're definitely in the box seat to snap up great valued properties,” Mr Kovacs said. “Keep in mind the seller has to sell."
