This article is from the Australian Property Journal archive
A STAGGERING 33.8% of homes in regional Western Australia and 20.1% in Perth were sold at a loss in the June quarter, making it one of the worst performing housing markets in Australia.
According to the CoreLogic RP Data’s latest Pain & Gain report, the results from outback WA did not fare any better, with 44% of homes selling at a loss.
The report shows 20.1% of houses in Perth or one in every five sold at a loss and it is even worse in central Perth, with 53% or more than half the properties selling at a loss – losing on average $60,000 per property.
CoreLogic’s Cameron Kusher said around the country, the proportion of loss-making resales over the quarter increased.
In Darwin, 24.2% of homes resold at a loss; the highest proportion since December 2002.
The proportion of loss-making resales in Sydney was 2.4%, Melbourne 4.4%, Brisbane 8.4%, Adelaide 10.6%, Hobart 10.8% and Canberra 9.6%.
Across the regional markets, the proportion of loss-making resales increased in New South Wales, Victoria, Queensland and Western Australia, and is unchanged in South Australia.
The proportion of resales at a loss were recorded at 7.3% in regional NSW, 9.3% in regional Vic, 19.8% in regional Qld, 21.7% in regional SA, 33.8% in regional WA, 19.6% in regional Tas and 21.2% in regional NT.
Sydney was the only capital city or regional market which had a lower proportion of units reselling at a loss compared to houses. In most regions the differential between the proportion of loss-making resales of houses and units was significant.
In Melbourne, Brisbane and the Australian Capital Territory, the proportion of unit resales at a loss over the quarter was more than double that of houses.
Based on the June quarter findings, 5.9% of capital city houses resold at a loss, up from 5.7% from the March 2016 quarter while units at 9.5% resold for less than the previous purchase price. Across regional housing markets, 12.2% of houses & 19.9% of units resold over the June 2016 quarter transacted below previous purchase price.
Capital cities losses & profits:
- $164,239,771 in losses from resales of capital city houses = $94,926 on average;
- $87,017,927 in losses from resales of capital city units = $67,456 on average;
- $9,953,211,125 realised for resale profit for capital city houses = $363,442 on average;
- Total resale profit for capital city units – $2,828,164,261 = $229,596 on average.
Regional areas losses & profits:
- $139,475,875 worth of house resold at a loss = $64,423 average loss
- $68,199,797 units resold at a loss = $61,944 average loss
- $2,400,837,922 in profits realised for houses = $154,773 on average
- $475,731,130 in profit realised for units across regional areas = $107,680 on average.
Kusher said whilst loss-making resales increased over the quarter, historically, most cities are still seeing quite a low instance of homes reselling at a loss.
“However, Perth and Darwin are the exceptions with the proportion of loss-making resales at, or close to historic highs.” Kusher concluded.
Australian Property Journal
