9 out of 10 property sellers make a profit
Slowing market conditions haven't stopped property sellers from turning a profit.
The CoreLogic Pain and Gain report has revealed that 91.1% of all homes sold in the December quarter were sold for a price above their previous purchase price. Profits from property resales over the quarter totalled $17.832 billion, while resale losses came to just $442 million.
The majority of profit was generated between Sydney and Melbourne resales, the CoreLogic analysis found. Sydney accounted for 33.1% of all profits, while Melbourne accounted for 29.4% of profits.
The analysis also revealed a gap between the proportion of houses resold for a profit versus the proportion of profit-making units. While 92.3% of houses resold for a profit, 88.2% of units saw a profit at resale.
Melbourne units were 10 times more likely to resell at a loss than Melbourne houses, while Brisbane units were 9 times more likely to resell at a loss than houses.
Investors proved more likely to resell for a loss than owner-occupiers. Over the December quarter, 7.5% of owner-occupied properties resold for a loss versus 11.3% of investor owned properties.
"In a falling market, owner-occupiers may be more prepared to sell at a loss if they are purchasing their next home at an equivalent or greater discount," CoreLogic analyst Cameron Kusher said.
"Meanwhile, investors, because of taxation rules, would seemingly be more prepared to incur a loss because they, unlike owner-occupiers, can offset those losses against future capital gains."