The phrase ‘situational selling’ describes vendors who are not choosing to sell in the hope of a profit, but because life circumstances have left them no choice. Unlike speculative investors or those looking to upgrade, these sellers are often dealing with a marriage breakdown, a death in the family, sudden unemployment, or the need to relocate for work or medical care.

According to Uribe’s report, the market is already weakening under rapid interest rate rises and stretched affordability. Some economists now expect double-digit declines in property values in Sydney and Melbourne from peak to trough, a fall that could wipe tens of thousands of dollars off the typical home. The 2020–2021 boom, fuelled by record low rates and government stimulus, is now unwinding, and homeowners who bought near the peak are particularly vulnerable.

But the reality for situational sellers is that timing is not a choice. A family going through separation cannot wait out the market; a widow inheriting a home cannot always afford the mortgage; a worker who has lost a job cannot delay the sale indefinitely. As more such properties come onto the market, they may add further downward pressure on prices, creating a feedback loop.

Not all commentators share the bleakest forecasts, however. Some property analysts argue that population growth, limited new housing supply and strong underlying demand will cushion the fall, especially in well-located areas. They say the market may be closer to a ‘mild correction’ than a crash, and that situational sellers represent a small proportion of overall listings. But they do concede that if unemployment rises sharply, forced sales could become more widespread.

Real estate agents have noted an increase in ‘sensitive’ listings — those with phrases like ‘must sell’ or ‘price reduced for quick sale’. Agents also warn that buyers remain cautious, waiting for prices to fall further, which can create a standoff and lengthen selling times.

For the homeowners affected, the emotional and financial toll is significant. Selling into a falling market can mean crystalising a loss rather than escaping debt; some may be forced to hold on and rent out their homes instead, transferring the stress to tenants or leaving themselves exposed to further declines.

The scale of situational selling is difficult to measure precisely, as agents do not routinely catalogue sellers’ personal circumstances. But the narrative captures an important human dimension of the downturn, one that sits behind the statistics and housing indices.