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Close to 10 per cent of homes sold in the March quarter recorded a gross loss from the original purchase price, according to RP Data.
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Lifestyle markets lead resale losses
16 June 2014
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The research and data company’s March 2014 quarterly Pain & Gain report revealed that of the 64,518 residential property resales, 9.8 per cent recorded a gross loss.
The gross value of the losses associated with these loss-making resales totalled $381.1 million, while positive March 2014 quarter resales recorded a gross profit relative to their original purchase price of $12.2 billion.
RP Data research analyst Cameron Kusher confirmed the areas to experience the greatest resale losses were the lifestyle regions.
“These areas continue to show the largest proportion of loss-making resales, particularly within the unit markets as opposed to detached housing markets,” said Mr Kusher.
Queensland’s Wide Bay region recorded the largest proportion of loss-making resales, with 30.6 per cent of all March 2014 quarter resales transacting at a price lower than the home was purchased for.
Mr Kusher said that while loss-making resales remain a high proportion of the market, in many of these regions the proportion of these sales is now trending lower.
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On the other hand, capital cities and regional areas associated with the agricultural sector performed well and recorded lower rates of loss-making resales, he said.
Sydney recorded the lowest proportion of loss-making resales in Australia.
The percentage of all home resales transacted over the first quarter of 2014 that recorded a gross loss was slightly up compared to the final quarter of 2013 but considerably lower than the 12.4 per cent recorded over the same period a year ago, said Mr Kusher.
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