CoreLogic has released analysis on the more than 70,000 home sales which took place over the first quarter of 2020, examining how many resulted in a loss or gain in value compared to the previous sale.
According to the Pain and Gain report, the portion of profit-making sales in the March quarter fell to 87.7% from 88.7% the quarter before.
The total value of gross profit arising from resold dwellings was down 12.0% to $19.8bn from the $22.5bn gained over the December 2019 quarter; however, the figure was substantially higher year on year given the $14.3bn in profit-making sales recorded in March 2019 when the housing market remained in a downturn.
Losses in the March quarter totalled $908.6m, up from $766m in the December 2019 quarter.
CoreLogic head of research Eliza Owen emphasised that the full impact of COVID-19 was not captured in this data set.
“There has been an uplift in the portion of loss-making sales over the March quarter. But, despite the potential for some fallout from COVID-19 at the end of the quarter, only a small portion of the loss making sales are a reflection of the onset of the pandemic,” she said.
However, while the portion of loss-making sales stayed relatively steady with the onset of strict social distancing in late March, the volume of sales has declined, with vendors likely to hold rather than sell in a highly uncertain economic period.
“The Pain and Gain results over the second half of 2020 could see an increase in the portion of loss-making sales, but the volume of sales activity may be more subdued, as vendors were less likely to test the market at the height of the pandemic,” Owen said.
“However, assistance for mortgage holders whose jobs and incomes have been impacted by the pandemic was likely also instrumental in keeping loss making sales low," she added.
Nationally, units had a higher portion of loss-making sales (19.8%) compared to houses (9.7%).
Across the capital cities, Sydney and Hobart were the only two regions which reported a decline in the portion of loss-making sales over the March quarter.