CoreLogic’s Pain and Gain Report is a quarterly analysis of residential properties which were resold over the quarter. It 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. It provides a proxy for the performance of each housing market and highlights the magnitude of profit or loss the typical seller of a home makes across those regions analysed.
Nationally, 9.4% of the dwellings resold over the third quarter of 2016 transacted for less than their previous purchase price. The 9.4% of dwellings resold at a loss was moderately higher than the 9.3% over the June 2016 quarter, however compared with the same quarter a year ago, the proportion of loss making sales has shifted 1.3 percentage points higher, continuing the trend towards more loss making sales across the Australian housing market. The proportion of loss making sales reached a recent low point over the three months to November 2016 when 7.9% of all resales were loss making. Since this time the proportion of loss making sales has been gradually drifting higher. The total gross loss realised over the quarter was recorded at $477.9 million with an average gross loss of $71,529 per sale.
More than 9 out of every 10 homes resold for more than their previous purchase price over the September 2016 quarter. Based on these resales there was $17.0 billion in realised profit over the quarter and the average profit across these resales was $262,672.
The data also highlights the fact that ownership of property, whether for investment or owner occupier purposes, should be seen as a long-term investment. Across the country, those homes that resold at a loss had a typical length of ownership of 6.1 years for houses and 6.5 years for units. Across all sales recording a gross profit the typical length of ownership was recorded at 9.1 years for houses and 7.6 years for units.
The capital city housing markets continue to record a lower proportion of loss-making resales than regional areas of the country. The trends in regional areas show that the instances of homes reselling at a loss are continuing to trend lower in the coastal and lifestyle markets while losses continue to climb in most of the regions linked to the resources sector
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