Pain and Gain: The Best and Worst in the March Quarter

According to the CoreLogic Pain & Gain March 2017 quarter report, nine out of 10 people (90.4%) who re-sold a property during the March 2017 quarter earned themselves a profit.

Report Highlights

  • 9.6% of dwellings sold for less than their previous purchase price over the first quarter of 2017.
  • Proportion of dwellings selling for less than the previous purchase price was higher than 2016.- showing a downward trend in prices
  • Houses continued to show a lower proportion of resales at a loss (8.1%) than units (13.3%)
  • Biggest regional losses occurred in areas linked to mining and resource areas
  • Regions outside but adjacent to Sydney seeing lower proportion of resales at a loss.
  • Melbourne continues to see relatively few resales at a loss however, the proportion of loss-making resales is lower in Geelong.
  • Capital city housing markets continue to record lower proportion of loss-making resales than regional areas of the country.
  • Many capital cities seeing growing divergence between the resale performances of houses relative to units.
  • Trends in regional areas show homes reselling at a loss continue to trend lower in most coastal and lifestyle markets.

The CoreLogic ‘Pain & Gain’ report is a quarterly analysis of residential properties sold over the quarter which compares 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.

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

In March, the report revealed some of the best and worst performing areas in the capital city and regional areas:

News South Wales
Best: Ashfield, Burwood, Hunters Hill, Kogarah & Waverly
Worst: Woolondilly, Hurstville, Hawkesbury

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

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

South Australia
Best: Marion, Adelaide Hills,Tea Tree Gully
Worst: Playford, Salisbury,West Torrens

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

Western Australia
Best: Kalamunda, Melville, Joondalup
Worst: Perth, Mandurah, Claremont

Northern Territory
Best: Litchfield
Worst: Darwin

Across the capital cities, results were varied: Sydney resales earned 97.8%, Melbourne 95.3%, Adelaide 92.5% and Hobart 95.4% while vendors in Darwin 63.0%, Perth 76.8%, Canberra 90.4% and Brisbane 90.8% profit earnings were significantly less.

In the regional areas of the country the top resale earners were in the Southern Highlands and Shoalhaven at 98.8%, Illawarra at 98.6%, Newcastle and Lake Macquarie at 98.2%, Sydney at 97.8% and Geelong at 97.3%.

The biggest regional losses came from regional areas closely linked to the mining and resources sector. The Pain & Gain regional results found that 11.1% of houses resold for less than their previous purchase price over the first quarter of 2017. By proportion, regional house sales losses were marginally higher than the 11.0% over the December 2016 quarter and slightly higher than the 10.9% in March 2016.

CoreLogic report author Cameron Kusher said, “There is still a relatively high proportion of units in regional Australia reselling at a loss (17.2%) however, the proportion of loss making unit sales has shifted substantially lower as lifestyle markets see buyer demand rebounding and mining regions approach the bottom of their cycle.”

At the end of 2016, 17.9% of regional units had resold at a loss and in March 2016 quarter the proportion was recorded at 19.7% of all properties. The 17.2% of regional units resold at a loss is the lowest proportion since the December 2010 quarter.

Mr Kusher said, “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 up coupled with little demand to purchase. As a result we are seeing a high proportion of vendors materialising their losses.”

Download the full report here.

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