Sydney property loss takers on the rise: CoreLogic Pain and Gain
Over the September 2016 quarter, 2.5% of Sydney houses and 1.9% of units resold for less than their previous purchase price, according to CoreLogic’s latest Pain and Gain report.
The property data firm says that although the instance of resale at a loss is low, there was a rise.
Across the individual capital cities, the proportion of loss-making resales over the September 2016 quarter were recorded at:
- Sydney 2.3% compared to 1.7% Sept 2015
- Melbourne 4.9% compared to 4.9% Sept 2015
- Brisbane 8.5% compared to 7.3% Sept 2015
- Adelaide 7.2% compared to 9.0% Sept 2015
- Perth 19.6% compared to 10.8% Sept 2015
- Hobart 8.4% compared to 12.0% Sept 2015
- Darwin 30.7% compared to 17.4% Sept 2015
- Canberra 12.2% compared to 11.4% Sept 2015
Botany Bay, Hunters Hill and Waverley council areas had no loss making resales over the quarter.
The chart below relates to Sydney only losses houses versus units.
The highest instances of resales at a loss was within the following council areas were: Fairfield (6.6%), Kogarah (4.4%) and Rockdale (3.8%).
Nationally, 8.0 percent of houses and 12.7 percent of units were resold at a loss over the September 2016 quarter, according to CoreLogic's latest Pain and Gain report.
The property data firm says that splitting this out across the capital cities and regional areas shows that for houses, 5.6 percent resold at a loss in the capital cities and 11.7 percent resold at a loss outside of the capital cities.
For units, 10.2 percent resold at a loss in the capital cities compared to 18.4 percent across regional areas of the country.
Sydney was the only major region nationally in which the proportion of units sold at a loss over the September 2016 quarter was lower than houses.
In many of the regions analysed the difference was significant with Melbourne, Brisbane, regional NT and the Australian Capital Territory recording a proportion of loss-making resales for units that was more than double that of houses.
The historical data indicates that it has been extremely rare for resales of houses to record a higher proportion of loss than units.
This is reflective of the fact that house values have typically increased at a more rapid pace than units.
It is also reflective of the fact that historically houses have recorded high buyer demand against a backdrop of constrained supply.
In a market like Sydney where more units have been built than houses over the past two decades - and the gap between house and unit prices is substantial - CoreLogic noted the trend had changed recently with units proving less likely to resell at a loss than houses.