Home sellers making profit, but number of loss-making sales rising
The number of properties selling at a loss is on the rise, though 9 out of 10 sellers are still seeing a profit.
CoreLogic’s March quarter Pain & Gain report found that 90.4% of homeowners who resold a property during the quarter made a profit. The median profit across the country was $185,000.
Sydneysiders saw the best average profit on their sales, at 97.8%. Hobart and Melbourne vendors also saw significant profits, at 95.4% and 95.3%, respectively. Vendors in Darwin had the slimmest profits, at 63%.
Across the country, 9.6% of dwellings sold at a loss. Units were much more likely to sell at a loss than houses. The report found 13.3% of units sold for a loss over the quarter, while 8.1% of houses sold for less than their initial purchase price.
“We found that houses are considered to be of more value given the underlying land value, whereas the value of a unit is much more linked to location rather than the value of the land,” CoreLogic analyst Cameron Kusher said. “We found that the unit sector is more prone to oversupply, which is another factor that is likely weighing down the resales performance.”
The proportion of capital city houses resold at a loss rose to 5.3% in the March quarter, up from 5.1% in the December 2016 quarter. The result was the highest proportion of loss-making capital city house sales since the three months to February 2014. Likewise, loss-making capital city unit sales were up, rising from 10.1% in the December quarter to 11.5% in the March quarter. The report found the proportion of capital city units reselling at a loss was around its highest level since early 2013.