Australians can find homes at lesser price in regional areas

On Tuesday, Core Logic RP Data has released the Pain and Gain press report that analyses homes resold over the quarter. The information is broadly based on comparisons between different properties to assess the profit or loss involved in its re-selling. The report casts light on how much a typical seller gains or losses from a home across the regions and provides a proxy based on each house’s performance.

With the beginning of the spring selling season, the hot Australian property market has seen less of buyers and surge in prices, but not every place in Australia faces the same problem. According to the report, there are places where Australians are actually selling their properties at a lesser price than what they paid for.

The report has revealed that loss-making resales escalated by 9.1 percent over the quarter, while 30.8 percent of resales earned double profits as compared to the previous purchase price. Cameron Kusher, Core Logic RP Data’s senior data analyst, said that loss over resales has been increasing since a few months, which is reflective of a broader aspect of the market that had only seen surge in prices for a long time.

"Within the regional areas of the country the proportion of loss-making resales is higher than those within the capital cities. The proportion of loss making resales is trending lower in Regional NSW and is fairly flat in most other areas except for Regional SA, Regional WA and Regional NT where loss-making sales are trending higher," Kusher wrote in the report.

He pointed out that loss-making resales in regional areas of the country were higher than in capital city housing markets continued.“The trends in regional areas are shifting with the proportion of loss-making resales trending lower in areas linked to tourism and lifestyle,” he added.

Highlights:

• Dwellings loss reported AU$411.3 million in total; an average loss of AU$65,585 per sale while profit-making resales amounted to $16.1billion, leaving owners with a profit of AU$259,174.
• Sydney recorded a lower proportion of resales at a loss by 1.8 percent than houses (2.2 percent) over the quarter, which makes it the only capital city housing market facing lower units in case of loss.
• The lowest proportions of loss-making resales were recorded in Sydney with only 2.0 percent, followed by Melbourne with 5.7 percent, Perth with 8.6 percent and Regional Vic with 8.6 percent.
• The highest proportions of loss-making resales were recorded in regional areas, with West Australia leading the pack with 24.5 percent, followed by regional Queensland with 22.5 percent, regional South Australia with 20.9 percent and regional Tasmania with 19.9 percent.
• During the second quarter of 2015, 7.7 percent of houses resold for less than their previous purchase price whereas across the capital cities, 5.0 percent of houses resold at a loss.

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