9.1% of properties sold at a loss

Corelogic’s most recent Pain and Gain Report revealed that 9.1 % of all homes resold of the June quarter recorded a gross loss when compared to their previous purchase price.

This is slightly higher result than the 8.6% recorded over the June 2014 quarter

Homes that resold at a loss were owned for an average of 5.3 years while those to profit from a resale, the average length of ownership was 9.9 years.

Homes which sold for more than double their previous purchase price were owned for an average of 16.4 years.

Report Highlights:

  •  Dwellings losses over the quarter amounted to $411.3 million; an average loss of $65,585 per sale.bucket house coin leaky
  • Profit-making resales recorded a healthy $16.1 billion, grossing owners $259,174 in profit.
  • While 9.1% of resales were transacted at a loss, the vast majority (90.9%) of properties resold over the quarter did so at a profit and 30.8% of homes resold for more than double their previous purchase price
  • 9.1 % of all homes resold of the June quarter recorded a gross loss when compared to their previous purchase price, and slightly higher than the results for the March 2015 quarter at 8.9% and a slightly higher result than the 8.6% recorded over the June 2014 quarter.
  • Sydney remains as the only capital city housing market in which units had a lower proportion of resales at a loss (1.8%) than houses (2.2%) over the quarter.
  • For the capital city and regional markets, the lowest proportions of loss making resales are currently found in: Sydney (2.0%), Melbourne (5.7%), Perth (8.6%) and Regional Vic (8.6%).
  • The highest proportions of loss making resales were recorded in: Regional WA (24.5%), Regional Qld (22.5%), Regional SA (20.9%) and Regional Tas (19.9%)
  • During the second quarter of 2015, 7.7% of houses resold for less than their previous purchase price compared to 12.6% of unit resales.
  • Across the capital cities, 5.0% of houses resold at a loss compared to 8.4% of units and in regional markets 12.5% of houses resold at a loss compared to 23.8% of units.

 More details:

The Pain and Gain Report is a quarterly analysis of homes which were resold over the quarter.

It compares the most recent sale price to the previous sale price in order to determine whether the property sold at a gross profit or gross loss.

pain gain 1

It provides a proxy for the performance of each housing market and highlights the magnitude of profit or loss the typical seller of a home makes across those regions analysed.

Over the June 2015 quarter, 9.1% of all homes resold recorded a gross loss when compared to their previous purchase price.

This figure was slightly higher than over the March 2015 quarter (8.9%) and also slightly higher than the 8.6% recorded over the June 2014 quarter.

Although the proportion of loss-making resales rose, the figure has been fairly steady over the past 12 months.

Across those dwellings which resold at a loss over the quarter, the total value of loss was $411.3 million with an average loss of $65,585.

While 9.1% of resales were transacted at a loss, the vast majority (90.9%) of properties resold over the quarter did so at a profit.

In fact, 30.8% of homes resold for more than double their previous purchase price.

Across those homes which resold at a profit, the total value of this profit was recorded at $16.1 billion with the average gross profit recorded at $259,174.

The data also highlights the fact that ownership of property, whether for investment or owner occupier purposes, should be seen as a long-term investment.

Across the country, those homes that resold at a loss had an average length of ownership of 5.3 years.

Across all sales recording a gross profit the average length of ownership was recorded at 9.9 years, while homes which sold for more than double their previous purchase price were owned for an average of 16.4 years.

The capital city housing markets continue to record a lower proportion of loss-making resales than regional areas of the country.

pain gain 2

The trends in regional areas are shifting with the proportion of loss-making resales trending lower in areas linked to tourism and lifestyle.pain gain 3

On the other hand, housing markets linked to the resources sector are generally seeing an increase in loss-making resales after housing market conditions in many of these locations have posted a sharp correction.

pain gain 4



Want more of this type of information?


Tim Lawless

About

Tim heads up the Core Logic RP Data research and analytics team, analysing real estate markets, demographics and economic trends across Australia. Visit www.corelogic.com.au


'9.1% of properties sold at a loss' have 2 comments

  1. October 1, 2015 @ 5:22 am peter vella

    I feel this information in its complete sum really is with out indication on true numbers………none the less,my view is simple BUY BUY BUY……..I LOVE REGIONAL QLD FOR MANY REASONS ,THE BIGGEST IS THE CAPITAL GAINS MADE OVER THE LAST 13 YEARS have towered the rooster crowing on the flogging of SYD/MELB although i have profited through my investments there as well,the obvious buy only with the intent of positive geared property with long term view…………the South East QLD region has been a key growth for me over 35 yrs of investing and still will be ..SYDNEY WEILL BE ON MY RADAR WHEN RATES RISE…

    Reply

    • October 1, 2015 @ 6:58 am Michael Yardney

      Peter thanks for leaving your rgular comments
      By the way…this report IS based on “true numbers”

      Reply


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