Nearly 90% of Australian homes sold during the second quarter of 2018 enjoyed a re-sale gross profit, with total re-sale gains of $15.683billion.
However, the share of re-sales at a profit was the lowest since October 2013.
Over the June 2018 quarter, 10.2% of residential properties resold at a price lower than the previous purchase price, with total realised gross resale losses of $469.4million.
The CoreLogic Pain & Gain Report is an analysis of homes resold over the June quarter which compares the most recent sale price to the home’s previous sale price, determining whether the property resold at a gross profit or gross loss.
It provides a quarterly proxy for the performance of the housing market and highlights the magnitude of profit or loss the typical seller of a home makes in those regions analysed.
The report showed the majority of Australia’s re-sale profit was generated by Sydney (32%) and Melbourne (27.4%), reflecting both the higher housing cost and strong property value growth in each city over recent years.
Hobart and Canberra were the only two capital cities in which the share of resales at a loss was lower.
Other key trends shown in the report include houses more likely to sell for a profit than units and also that investors are more likely to sell at a loss than owner occupiers.
CoreLogic head of research Tim Lawless said, “Houses consistently record a higher proportion of resales at a profit than units. This may be attributed to the underlying land value of detached houses, which is a significant part of the overall value. But it’s also because unit markets can be more prone to oversupply than house markets.
“Capital city properties being resold remain more likely to sell for a profit than those in regional markets but over the past three months the gap has narrowed, due to a decline in resales at a loss in regional markets and an increase across the combined capital cities.
“Over the June 2018 quarter, 89.8% of capital city properties resold for a profit, down from 91.3% the previous quarter as well as being lower than the 92.7% a year earlier. In fact, the share of profit-making resales over the March 2018 quarter was the lowest since March 2013.”
