CoreLogic March 2017 quarter Pain & Gain Report: Find out the best and worst for property resales over the March 2017 quarter
According to the CoreLogic Pain & Gain March 2017 quarter report, nine out of 10 people (90.4%) who re-sold a property during the March 2017 quarter earned themselves a profit. Combined, the Pain & Gain results revealed that house and unit resales earned $20.9 billion in profits over the quarter with the median profit around $185,000. In contrast, the total gross losses realised over the quarter was recorded at $493.8 million with a median gross loss of $35,000 per re-sale.
A quarterly analysis of residential properties which were resold over the quarter, the CoreLogic Pain & Gain report compares the most recent sale price to the previous sale price in order to determine whether the property sold at a gross profit or gross loss. It provides a proxy for the performance of each housing market and highlights the magnitude of profit or loss the typical seller of a home.
Around the country, the CoreLogic Pain & Gain report reveals some of the best and worst performing areas in the capital city and regional areas:
|State||Best Performing Areas||Worst Performing Areas|
New South Wales
|Ashfield, Burwood, Hunters Hill, Kogarah & Waverly||Woolondilly, Hurstville, Hawkesbury|
|Mitchell, Murrindindi, Hobsons Bay||Melbourne ,Stonnington, Port Phillip|
|Redland, Moreton Bay, Logan||Lockyer Valley, Somerset, Ipswich|
|Marion, Adelaide Hills, Tea Tree Gully||Playford, Salisbury,West Torrens|
|Kingsborough, Clarence||Derwent Valley, Brighton, Sorell|
|Kalamunda, Melville, Joondalup||Perth, Mandurah, Claremont|
Across the capital cities, vendors reselling earnings were varied: Sydney resales earned 97.8%, Melbourne 95.3%, Adelaide 92.5% and Hobart 95.4% while vendors in Darwin 63.0%, Perth 76.8%, Canberra 90.4% and Brisbane 90.8% profit earnings were significantly less.
In the regional areas of the country the top resale earners were in the Southern Highlands and Shoalhaven at 98.8%, Illawarra at 98.6%, Newcastle and Lake Macquarie at 98.2%, Sydney at 97.8% and Geelong at 97.3%. The biggest regional losses came from regional areas closely linked to the mining and resources sector. The Pain & Gain regional results found that 11.1% of houses resold for less than their previous purchase price over the first quarter of 2017. By proportion, regional house sales losses were marginally higher than the 11.0% over the December 2016 quarter and slightly higher than the 10.9% in March 2016.
CoreLogic report author Cameron Kusher said, “There is still a relatively high proportion of units in regional Australia reselling at a loss (17.2%) however, the proportion of loss making unit sales has shifted substantially lower as lifestyle markets see buyer demand rebounding and mining regions approach the bottom of their cycle.”
At the end of 2016, 17.9% of regional units had resold at a loss and in March 2016 quarter the proportion was recorded at 19.7% of all properties. The 17.2% of regional units resold at a loss is the lowest proportion since the December 2010 quarter.
Mr Kusher said, “While the proportion of loss making sales has started to reduce in some of these regions, there remains a high willingness from home owners to sell up coupled with little demand to purchase. As a result we are seeing a high proportion of vendors materializing their losses.”
- 6% of dwellings sold for less than their previous purchase price over the first quarter of 2017.
- Proportion of dwellings selling for less than the previous purchase price was higher than 2016.- showing a downward trend in prices
- Houses continued to show a lower proportion of resales at a loss (8.1%) than units (13.3%)
- Biggest regional losses occurred in areas linked to mining and resource areas
- Regions outside but adjacent to Sydney seeing lower proportion of resales at a loss.
- Similarly Melbourne continues to see relatively few resales at a loss however, the proportion of loss-making resales lower in Geelong.
- Capital city housing markets continue to record lower proportion of loss-making resales than regional areas of the country.
- Many capital cities seeing growing divergence between the resale performances of houses relative to units.
- Trends in regional areas show homes reselling at a loss continue to trend lower in most coastal and lifestyle markets.
The CoreLogic Pain & Gain results show that since 1997, there has never been a quarter to experience a higher proportion of houses which resold at a loss than units. Mr Kusher said, “We found that houses were considered to be of more value given the underlying land value, whereas the value of a unit is much more linked to location rather than the value of the land.”
Additionally, he said, “we found that the unit sector is more prone to over supply which is another factor that is likely weighing down the resales performance.”
This may go some way in explaining why houses tend to see fewer resales at a loss compared to units; over the March 2017 quarter, 8.1% of houses and 13.3% of units resold at a loss across the country. 6.1% of capital city houses and 11.5% of capital city units resold for less than their previous purchase price over the March 2017 quarter.
The proportion of houses resold at a loss has increased from 5.1% over the December 2016 quarter and 5.3% over the March 2016 quarter. The proportion of capital city houses resold at a loss was at its highest level in March 2017 since the three months to February 2014. The proportion of capital city units resold at a loss was higher than the 10.1% recorded over the final quarter of last year and the 9.8% a year ago. The proportion of capital city units reselling at a loss is hovering around its highest level since early 2013.