More home sellers losing money
There has been a rise in the proportion of homes reselling at a loss, with the sharpest increases in Perth and Darwin.
CoreLogic’s Pain and Gain report has revealed that the proportion of properties reselling at a loss has risen 1.3% higher compared to the same quarter last year. The change was seen most dramatically in Perth and Darwin, where loss-making resales nearly doubled.
In spite of the rise, CoreLogic said more than nine out of 10 of all homes resold over the quarter were sold at a profit.
“Although the occurrence of losses rose over the quarter, in most cities the instances of homes reselling at a loss is low with the exceptions being Perth where almost two out of every five dwellings resold at a loss and Darwin where approximately three out of every 10 resales was at a loss over the quarter,” CoreLogic researcher Cameron Kusher said.
Sydney saw the highest value of profit-making sales, for a total profit of $6.22 billion. Melbourne, meanwhile, had the lowest proportion of loss-making resales at 2.1%.
The average loss on loss-making sales nationwide was $71,529. The average profit was $262,672.
Kusher said the results also showed a disparity between house sales and unit sales.
“In most instances, houses virtually always show a lower proportion of loss-
making resales than units. The likely reason for this is that the value of a house is
largely derived from the land and its location. Also, typically houses have
increased in value at a faster rate than units. Over the September 2016 quarter, 8.0% of houses resold at a loss nationally compared to 12.7% of units,” he said.