Homeowners are slashing prices on properties from the beach to the bush as a buyer’s market emerges in the wake of increasing mortgage stress and more realistic seller expectations.

Vendor discounting is becoming increasingly common in parts of the state, with sellers starting to reduce ambitious asking prices by hundreds of thousands of dollars — or up to 32 per cent in some cases — as spring listings begin to rise.

Data provided exclusively by SQM Research reveals Queensland has more than 1600 distressed listings — the highest in the country, with discounted properties ranging from a house in Shailer Park with a $250,000 price cut to a unit in Airlie Beach that is now $155,000 cheaper.

This huge family home at 39 Jasmine Cres, Shailer Park, had its price reduced by $250,000 to $1.1m.

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Originally on the market for $678,000, this three-bedroom house at 42 Leichhardt Tce, Russell Island, has now been reduced by $20k to $658,000.

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A quick search online resulted in around 30 homes being listed with ‘price reduced’ in the marketing, including a five-bedroom house with a pool in Robina, an apartment on South Stradbroke Island, and an investment property in Crestmead.

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Digital Finance Analytics director Martin North said there was evidence of “deeper drops” in asking prices as listings began to rise.

“Five to eight per cent vendor discounts seem common, and more at the top end of the market — 15 per cent in some cases, which is very different from a year ago,” Mr North said.

This six-bedroom house at 151A Kirby Rd, Aspley, has had its price reduced from $1.5m to $1.45m.

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This property at 2 Lorikeet Close, Port Douglas, is on the market with a $120,000 price reduction: going from $1.1m to $980,000.

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“We are also seeing more ‘forced’ sales due to mortgage pain/arrears, where vendors have to sell.”

Mr North said vendor discounts were lower in Queensland than some other states, but selling agents were offering higher initial valuations given the more buoyant market.

Ray White Cairns agent Luke Bantoft just reduced the price on one of his listings by $10,000 in the hope of making it more attractive to buyers.

Mr Bantoft said was “seeing price reductions coming across the board”.

This five-bedroom house at 68-70 River Gum Dr, Diddillibah, was recently sold after its priced was reduced to offers over $1.9m.

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This three-bedroom unit at 2105/4 The Esplanade, Surfers Paradise, was placed under offer for an amount over $1.975m, after having its price reduced.

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“The cost of living is hurting people financially,” he said. “Each year, owners are seeing increased amounts of insurance, increased amounts of body corporate levies, increased interest rates, and I don’t think they can afford to keep going.”

Mr Bantoft said investment properties were especially affected by Queensland’s rising home prices, with changing tenancy laws preventing investors from raising rent high enough to offset expenses.

“I think the cost of servicing the property versus return is just well outweighed,” he said.

At least half a dozen properties in the tropical town of Port Douglas have had their prices dropped as wealthy holiday home owners start to realise the pandemic days of record sales may be over.

This two-bedroom unit at 27/16 Golden Orchid Dr, Airlie Beach, has had its price reduced by $155,000 to $695,000.

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This five-bedroom house at 94 Orange Grove Rd, Coopers Plains, is on the market for offers over $1.4m – but was reduced by $200,000 from $1.6m.

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Queensland Sotheby’s International Realty agent Caroline Yarr said the Port Douglas market had not dropped, but agent and vendor expectations had.

“It’s a sign of the times at the moment,” Ms Yarr said. “Vendors think their properties are continuing to go up in value and buyers think they’re crashing.

“It’s a matter of correcting some vendors’ expectations. Where we were trying to get record breaking prices every time, even us as agents have had to correct ourselves.”

Many of the suburbs where markets have cooled were found in regional areas that were popular with buyers who escaped the cities during the pandemic, the data shows.

This four-bedroom house at 5 Pakee St, Alexandra Headland, was placed under offer for a reduced amount over $1.7m.

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PropTrack senior economist Anne Flaherty said many regional Queensland markets were seeing declines after a huge run-up in prices during the pandemic when buyers flocked to popular lifestyle destinations outside the major cities.

“It’s fascinating to see how much of a price correction we’ve seen in a lot of these areas that were massive outperformers during the pandemic period,” she said.

“We had outsized demand during the pandemic for a lot of these lifestyle areas at the same time that interest rates were extremely low, so people had a lot of borrowing power.”

Ms Flaherty said the Noosa suburb of Sunshine Beach, where the median price was now $2.4m — about 32 per cent lower than the peak of $3.525m July 2022 — exemplified the trend.

This four-bedroom house at 16 Lycoris St, Crestmead, is on the market for offers over $699,000. It was originally listed for $729,000, making for a $30,000 price reduction.

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This four-bedroom house at 3 Bareki St, Wurtulla, is under contract for an offer over $1.295m. It recently had its price reduced by $55,000 from $1.35m.

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“The competition in Sunshine Beach was so fierce that people were really bidding up the prices,” she said.

“Now what we’ve seen is it’s still a premium suburb, but the intensity to buy in that suburb has cooled significantly so prices have fallen.”

A four-bedroom house at 14 Adams St, Sunshine Beach, is currently listed for sale by ‘motivated vendors’.

Rethink Residential Group CEO Scott O’Neill said it was unlikely mortgage holders who were facing difficulties would find relief in the near future, which may compel some to sell their homes.

This three-bedroom apartment at 55/11 Innovation Parkway, Birtinya, is on the market for $1.25m after having its price reduced.

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This four-bedroom house at 61 Theatre Dr, Benowa, is on the market after having its price reduced.

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“Most borrowers are managing to keep their mortgage payments on schedule, however, recent data from APRA indicates that mortgage arrears are on the rise, though they remain low compared to pre-Covid levels,” Mr O’Neill said.

Mortgage arrears — consisting of non-performing loans and borrowers who are 30 to 89 days late on payments — now account for 1.6 per cent of home loans.

It comes as RBA Governor Michele Bullock warned her “message on interest rates is not what many borrowers want to hear” especially “as labour market conditions ease, more households will experience a strain on their finances from unemployment or reduced working hours.”

Ms Bullock said RBA estimates around 5 per cent of owner-occupiers were “in a particularly challenging situation, where the combined total of their essential spending and scheduled mortgage repayments is more than their income”.

“Some may ultimately make the difficult decision to sell their homes,” she warned, with lower income borrowers “over-represented in the group of people who are really struggling.”

**Nicholas Finch was a co-author of this story.