Resales Earn $20.9bn Over Last Quarter

Nine out of 10 people (90.4%) who re-sold a property during the March 2017 quarter earned themselves a profit, according to CoreLogic’s new report, Pain and Gain, March Quarter 2017.

Combined, the results revealed that house and unit resales earned $20.9bn in profits over the quarter, with the median profit around $185,000. In contrast, the total gross losses realised over the March quarter was recorded at $493.8m, with a median gross loss of $35,000 per re-sale.

CoreLogic’s quarterly Pain and Gain reports analyse residential properties that were resold over the quarter. They compare 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. This provides a proxy for the performance of each housing market, and highlights the magnitude of profit or loss for the typical seller of a home.

Across Australia, 9.6% of dwellings sold for less than their previous purchase price over the first quarter of 2017. The proportion of dwellings selling for less than the previous purchase price was higher than the 8.8% over the final quarter of last year. Additionally, houses have continued to show a lower proportion of resales at a loss (8.1%) than units (13.3%).

 

Best and worst performing areas

The latest report revealed some of the best and worst performing areas in the capital city and regional areas for the March quarter:

New South Wales

  • Best: Ashfield, Burwood, Hunters Hill
  • Worst: Woolondilly, Hurstville, Hawkesbury

Victoria

  • Best: Mitchell, Murrindindi, Hobsons Bay
  • Worst: Melbourne, Stonnington, Port Phillip

Queensland

  • Best: Redland, Moreton Bay, Logan
  • Worst: Lockyer Valley, Somerset, Ipswich

South Australia

  • Best: Marion, Adelaide Hills
  • Worst: Playford, Salisbury

Tasmania

  • Best: Kingsborough, Clarence
  • Worst: Derwent Valley, Brighton

Western Australia

  • Best: Kalamunda, Melville
  • Worst: Perth, Mandurah

Northern Territory

  • Best: Litchfield
  • Worst: Darwin

Losses are more acute in regional areas

“Looking at the regions where the instances of loss are highest, it continues to be headed by regional areas of the country, particularly those linked to the mining and resources sector. While the proportion of loss making sales has started to reduce in some of these regions, there remains a high willingness from home owners to sell but little demand to purchase which is resulting in a high proportion of vendors materialising losses,” the CoreLogic report said.

While the Sydney and Melbourne housing markets have been powerhouses over recent years, regions outside but adjacent to Sydney are seeing a lower proportion of resales at a loss. Similarly, Melbourne continues to see relatively few resales at a loss. However, the proportion of loss-making resales is actually lower in Geelong, which is situated 75km southwest of Melbourne.

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