The proportion of properties which made a loss on resale decreased in the December quarter, according to the latest research.
The latest Pain & Gain Report released by CoreLogic RP Data yesterday revealed that the proportion of loss-making resales fell to 8.6% over the December 2014 quarter. This was down from 9.1% the previous quarter and 9.6% a year earlier.
According to the report, Sydney, Perth and Melbourne recorded the lowest proportion of loss-making resales. CoreLogic RP Data research analyst and author of the report, Cameron Kusher, said this was unsurprising.
“Sydney and Melbourne in particular are reflective of the fact that these two cities are currently seeing the strongest growth in home values. Similarly Regional NSW and Regional Vic have recorded the lowest proportion of loss-making resales across the regional areas,” he said.
“Sydney and Melbourne along with Regional Vic and Regional NSW are expected to continue to see a trend towards fewer loss-making sales as the growth in home values persist. Perth on the other hand is likely to see an increase with the rate of home value growth having slowed sharply over the past year.”
However, the report also revealed that making a gross profit or loss on property differs significantly from property-to-property and area-to-area, and in some instances is based on the length of time a property has been owned.
According to Kusher, only 4.9% of homes purchased pre-GFC and sold during the December quarter of 2014 made a gross loss. Meanwhile, 14.1% of homes purchased on or after January 2008 recorded a gross loss relative to the previous purchase price.
For resales incurring a gross loss over the December quarter, the average length of ownership was just 5.9 years. Properties that recorded a gross profit were held for an average of 10.2 years, while those homes that resold for more than double the previous purchase price were owned for an average of 16.8 years.
Do you have more than $200k in your super fund? You could use your super to buy property - Find out how
Top Suburbs :
Get help financing your investment
Do you need help finding the right loan for your investment?
When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.
Just fill in a few details below and we'll then arrange for a local expert Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus, our mortgage broking service is at no cost to you.
We value your privacy and treat all your information seriously - you can check out