9 out of 10 homes selling at a profit

The value of residential sales on resold properties hit $17.7 billion in the September 2017 quarter, far greater than any losses seen across Australia.

According the latest CoreLogic figures, resale losses grossed $453.8 million, with 90.8 per cent of all properties resold hitting at a price at, or in excess of the previous purchase price.

The CoreLogic figures are on trend with June 2017 quarter and September 2016 quarter figures, which recorded 90.0 per cent of resales at a profit.

Proportion of total resales at a loss/gain, houses vs. units, Sep 2017 quarter

Source: CoreLogic

According to the above chart, Capital city properties resold 92.6 per cent at a profit, compared to 87.8 per cent of regional properties.

Melbourne saw the greatest percentage for houses resold (99.2 per cent for profit), and Sydney for unit resales (98.5 per cent for profit). Regional NSW hit 95.7 per cent for houses resold at a profit and Regional VIC had 93.4 per cent of units resold at a profit.

CoreLogic also reported that over the first three quarters of 2017 there has been “a slight increase in the proportion of properties reselling for less than their previous purchase price”.  

CoreLogic Head of Research, Cameron Kusher, believes this is largely being “driven by capital city markets in which the instances of loss-making resales have trended a little higher while the regional markets are seeing a decline in loss-making resales.”  

“Despite ongoing commentary about the weaker unit market conditions, the Pain & Gain September quarter research showed that detached houses have actually driven the increase in loss making resales over the first three quarters of 2017,” said Mr Kusher.

Reports of the real estate market cooling in Sydney and Melbourne has been mentioned previously on RateCity, and due to this Mr Kusher expects the instances of resales at a loss will likely “continue to trend higher throughout the final quarter of 2017 and into 2018.”

“It is reasonable to expect that the instances of loss-making resales of units may climb over the coming year as the housing market loses momentum and supply increases.

“As values fall in Sydney, this could lead to some increases in loss-making resales in areas surrounding Sydney,” said Mr Kusher.

However, for non-Sydneysiders, losses are likely to remain low in Geelong and expected to trend lower on the Gold Coast and Sunshine Coast, according to the report.

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