Powered by MOMENTUM MEDIA
subscribe to our newsletter

Dwelling resale losses increase nationally

The proportion of national dwelling loss-making resales has increased over the quarter, despite that fact that “9 out of 10 homes resold for more than their previous purchase price”, a report has revealed.

CoreLogic’s Pain and Gain report provides a quarterly examination of Australia’s housing market by analysing the gross profits or gross losses of residential properties across various housing markets that were resold over the quarter.

Over the June quarter, the report found that nationally, 9.5 per cent of all dwellings recorded a resale gross loss, a figure up from 9.3 per cent recorded in the March quarter, and the highest proportion recorded since March 2014.

Across all capital cities, 5.9 per cent of houses were resold at a loss, while 9.5 per cent of city apartments also resold for less, totalling around $164.2 million in losses from house resales and $87 million in losses from unit resales over the quarter.

The highest proportions of capital city dwelling resale losses since 2002, however, were found in Perth (20.1 per cent) and Darwin (24.2 per cent). These two cities had the proportion of loss-making sales, “at, or close to historic highs”.

Advertisement
Advertisement

In fact, loss-making resales in capital cities were also found to be much lower than in regional markets, sitting at 7.1 per cent as opposed to 14.1 per cent, with regional areas experiencing the highest proportion of total resales at a loss since the three months to August 2015 for houses and the three months to February 2016 for units.

“The differential between the proportion of loss-making resales of houses and units was significant”, noted Cameron Kusher, head of research for CoreLogic, adding that the proportion of unit resales at a loss was “more than double that of houses” across capital cities, excluding Sydney.

“Houses have typically recorded a superior rate of capital growth to that of units and those houses … tend to record a much greater profit than units. These factors go some way to explaining why units are recording a much higher proportion of loss-making resales than houses,” he said.

The report noted, however, that given “less than 10 per cent of homes resold at a loss over the quarter, more than 9 out of 10 homes resold for more than their previous purchase price”.

“While loss-making resales increased over the quarter, historically, most cities are still seeing quite a low instance of homes reselling at a loss,” Mr Kusher said.

PROMOTED CONTENT


Across these sales, a total profit was recorded at $15.7 billion with an average profit of $262,550 per resale.

[Related: Capital city land prices rise in excess of home values]

Dwelling resale losses increase nationally
mortgagebusiness

Are you a new-to-industry broker in the process of growing your business? Then there’s some great news: The Adviser’s New Broker Academy is back in 2021 and will provide you with essential insights into cutting-edge tools, strategies and processes to fast-track to success. Don’t miss your chance to attend. To secure your FREE place, visit newbroker.com.au now!

Latest News

Reverse mortgage lenders have accessed a small fraction of the potential retiree housing market in Australia, according to Deloitte. ...

Pepper Money has priced its second I-Prime deal for the year, upsizing the figure to $850 million. ...

The LMI provider has announced a new CFO following the resignation of its current CFO, effective 24 September. ...

Join Australia's most informed brokers

Do you know which lenders are providing brokers and their customers with the best service?

Use this monthly data to make informed decisions about which lenders to use. Simply contribute to the survey and we'll send you the results directly to your inbox - completely free!

How long do you think it should take to discharge a mortgage?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.