Powered by MOMENTUM MEDIA
Powered by MOMENTUM MEDIA
subscribe to our newsletter
Dwelling resale losses increase nationally

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.

Advertisement
Advertisement

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”.

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.

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

 

Latest News

The proportion of home owners considering an upsize has more than doubled over the past year, according to new Westpac research. ...

More than half of the population (54 per cent) have been negatively affected by misconduct among finance service providers, according to a...

The mandatory comprehensive credit reporting bill has been updated to include changes to the reporting of hardship arrangements, with stakeh...

FROM THE WEB
podcast

LATEST PODCAST: Acquisitions and evolution

Do you think the banking royal commission recommendations could negatively impact competition in the mortgage market?

Website Notifications

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