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Resellers continue to see healthy profits

Resellers of homes continue to make healthy profits right across the nation, with 9 out of 10 properties making their owners a profit when resold.

According to the latest Corelogic Pain and Gain Report, 87.1% of properties resold in the June quarter achieved a higher sale price compared to their original purchase price.

As has been the case recently, it was Sydney and Melbourne that featured the healthiest profits for sellers. With Sydney earning resellers a 27% profit while Melbourne was close behind at 26.4%. While the highest percentages of profitable house resales were to be found in Hobart (98.4% and the ACT (97.3%).

The Pain and Gain Report continues to highlight the fact that the housing market is still sharply divided. The major cities of Sydney and Melbourne continue to show strong signs along with Hobart and the ACT, while the mining states are still struggling to recover from their current downturn.

The greatest pain was felt in Darwin, where 48.2% of properties sold at a loss, while Perth, also recorded a loss for 36.1% of all property resales. 

The gains across the country came in at $16.3 billion  and were also achieved on the back of a softer housing market throughout the June quarter.

CoreLogic head of research Tim Lawless said the results reflected the underlying strength in the nations property markets.

“Despite a downward trend nationally, the vast majority of homeowners continue to resell their properties for a profit, highlighting the longer term positive trend in market conditions,” said Mr Lawless. 

“Over the three months to June 2019, owner-occupiers were more likely than investors to realise a profit from selling their property. This trend was evident across the combined capitals, but particularly in Melbourne, Brisbane and Canberra, where investors were more than twice as likely to sell at a loss compared to owner-occupiers.” 

For the first time since early 2009, regional markets slightly outperformed the capital city markets, with 87.9% of regional sales profitable compared to 86.6% in the cities. 

“Coastal regions and areas close to the capital cities are stronger over the second quarter, while sellers in the major mining areas may still be finding it challenging to generate a profit. Around half of all properties sold in the North and South Outback areas of WA generated a loss for the seller over the June quarter.”

The report also highlighted a slight increase in properties that sold at a loss across Australia year on year. In the three months to June 2019, 12.9% of resales nationally were below the previous purchase price, which was the highest share since June 1999. This compares to 9.3% in June 2018 and 12.1% in the March 2019 quarter.

Best & worst performing suburbs by state

Sydney 

  • The most profitable area in Sydney for resales was The Hawkesbury, followed by The Hills Shire and Randwick. 
  • The greatest share of resales at a loss occurred in Strathfield, Botany Bay and Fairfield.

Melbourne 

  • The greatest gains were in Macedon Ranges and Moorabool, where no resales were reported at a loss. 
  • Melbourne had the highest proportion of resales at a loss. In Stonnington, almost a quarter of resales were at a loss. 

Brisbane 

  • The greatest gains were recorded in Redland and Lockyer Valley
  • Losses were most common in Scenic Rim.

Adelaide 

  • The greatest gain was in Mallala, which reported 100 per cent of resales at a profit. Burnside and Mitchum also delivered a high percentage of profit-making sales.
  • Playford and Gawler recorded the highest losses.

Perth 

  • Gains were greatest in Peppermint Grove, which recorded no resales at a loss over the quarter, while Nedlands was also strong
  • The highest share of resale losses were in Perth, Bayswater and Belmont. 

Hobart 

  • Sellers had the greatest chance of making a profit in Sorell, which recorded no resales at a loss over the quarter. While Hobart and Kingborough were highly profitable. 
  • Brighton reported the highest loss over the quarter. 

Darwin 

  • Litchfield recorded the greatest gains. 
  • Darwin and Litchfield made a loss over the quarter.

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