A quarterly assessment of realised gross profit and loss based on dwelling re-sales over the September Quarter of 2014

The CoreLogic RP Data Pain & Gain Report is a quarterly assessment of realised gross profit and loss based on dwelling re-sales over the September Quarter of 2014.

Over the September 2014 quarter, 9.3% of all home resales recorded a gross loss compared to their previous purchase price. The figure increased slightly from 9.0% over the June 2014 quarter, but was much lower than the 11.0% recorded over the September 2013 quarter. The total value of these loss-making resales over the quarter was $383 million and the average loss was $62,246.

The data shows that the vast majority of resales (90.7%) recorded a gross profit over the quarter with 30.1% selling for more than double their original purchase price. The gross profit across all profit-making resales was $13.5 billion and the average gross profit across these resales was $223,870.

The likelihood of making a gross profit or loss is quite different based on the length of time a property has been owned. As a stark example, those homes that were previously purchased prior to January 1st, 2008 (ie pre-GFC) and were subsequently sold during the September quarter of 2014, only 5.2% of resales were made at a gross loss. For those homes that were purchased on or after January 1st, 2008 the propensity to make a loss on the resale climbs substantially. Of those homes that resold over the September 2014 quarter, 15.2% recorded a gross loss relative to the previous purchase price.

To further illustrate this point, for those resales that incurred a gross loss over the September quarter, their average length of ownership was just 5.7 years. Properties that recorded a gross profit were held for an average of 9.9 years, while those homes that resold for more than double the previous purchase price were owned for an average of 16.8 years.

 

Profit & Loss across Capital Cities and Regional areas*

*Results also included in the report but not in table above: 0% to 10% Profit; 10% to 25% Profit.

 

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