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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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6 minute read
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.
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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.
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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