Pain and gain in the re-sale stakes

by AB17 Jun 2014
Lifestyle properties are faring badly in the re-sale stakes – but overall most Australians selling residential property are making a pretty packet. 

The RP Data March 2014 quarterly Pain & Gain report, released yesterday, showed of the 64,518 residential property re-sales, 9.8% recorded a gross loss from the original purchase price.
The gross value of these losses came to $381.1 million and the average gross loss per transaction was $60,544.
However, 90.2% of all March quarter re-sales recorded a gross profit on their original purchase price – equating to $12.2 billion – with 30.6% of all re-sales at least doubling their money compared with their original purchase price.
The average gross profit per transaction was $225,088.

RP Data research analyst Cameron Kusher said the likelihood of making a gross profit or loss is based on the length of time a property has been owned.

Re-sales which incurred a gross loss over the quarter had been owned for an average of just 5.5 years.

Properties that recorded a gross profit were held for an average of 9.7 years, while homes which recorded a gross profit of more than 100% on the previous purchase price were owned for an average of 16.2 years.

Lifestyle regions saw the greatest re-sale losses over the quarter, Kusher said.
“These areas continue to show the largest proportion of loss making re-sales, particularly within the unit markets as opposed to detached housing markets.”
 Queensland’s Wide Bay region recorded the largest proportion of re-sale loss, with 30.6% of all March quarter re-sales losing money.
On the other hand, capital cities and regional areas associated with the agricultural sector performed well and recorded lower rates of re-sale loss.
Sydney recorded the lowest proportion of loss-making re-sales in Australia, with only 9.8% losing money in the sale.
This is a slight increase from 9.7% at the end of last year, however, it was lower than the 12.4% recorded over the same period a year ago.