Pain & Gain report figures released
Australians are still profiting from real estate on a mass scale, according to a new report, despite the number of loss-making sales rising over the most recent quarter.
A total of 30.8 per cent of homes sold in the June quarter resold for more than double their previous purchase price, according to CoreLogic RP Data’s latest Pain & Gain report.
The average period of ownership for those homes generating more than double their initial purchase price was 16.4 years in capital cities and 17.6 per cent in regional markets.
The result forms part of the 90.9 per cent of overall property sales sold at a profit during the quarter.
According to CoreLogic RP Data, the total value of this profit was $16.1 billion, with an average gross profit of $259,174.
Of the 9.1 per cent of property sales making a loss, an average loss of $65,585 was recorded, with a total loss of $411.3 million. The number of losses over the June quarter represented a slight increase on the previous quarter’s result (8.9 per cent) and that from the year prior (8.6 per cent).
Sydney and Melbourne recorded the lowest proportion of losses – 2 per cent and 5.7 per cent respectively.
This was followed by Perth and regional Victoria, both sitting on 8.6 per cent.
On the other end of the scale, the highest proportion of loss-making sales were recorded in regional WA (24.5 per cent), regional Queensland (22.5 per cent), regional South Australia (20.9 per cent) and regional Tasmania (19.9 per cent).
The report explained these results as being linked to changing economies in regional markets.
“The trends in regional areas are shifting with the proportion of loss-making resales trending lower in areas linked to tourism and lifestyle. 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,” the report stated.
Houses continued to outperform units on a national scale, with 7.7 per cent of houses reselling for less than their previous purchase price compared with 12.6 per cent of units.
This pattern also applied on a market-by-market basis, with the exception of Sydney, where 1.8 per cent of units sold at a loss compared with 2.2 per cent of houses.
Owner-occupiers fared better than investors, with 11.9 per cent of investors reselling at a loss compared with 7.7 per cent of owner-occupiers across the national market.
Darwin was the only location where investors came out on top – 12.7 per cent of investors selling at a loss compared with 17.9 per cent of owner-occupiers.
Read more:
1 simple mistake that can destroy your investment plans
New buyer type responsible for growth
Big change in building approvals
Exclusive series: The 6 week property transformation – episode 4.2
Exclusive series: The 6 week property transformation – episode 4.1