Homes in mining hotspots are still reselling for a loss: CoreLogic

Homes in mining hotspots are still reselling for a loss: CoreLogic
Homes in mining hotspots are still reselling for a loss: CoreLogic

Despite commodity prices increases, many homes in areas of the country linked to the resources sector continue to sell for less than their previous purchase price, according to CoreLogic's latest Pain and Gain report.

The property data firm says that across the major regions analysed, the proportion of loss-making resales over the December 2016 quarter was recorded at: 44.3 percent in Fitzroy, 8.2 percent in Hunter Valley (excluding Newcastle), 58.4 percent in Mackay, 30.3 percent in Outback SA, 42.6 percent in Townsville and 50.1 percent in Outback WA.

Although the proportion of resales at a loss remains high in most regions, the figure has actually reduced over the quarter in all regions except Outback WA.

Many of these regions continue to experience soft labour markets, low housing demand and high levels of housing stock available for sale, the report said.

It is also apparent that plenty of home owners are willing to sell, however, there remains a lack of willing buyers.

Those that are able to find a buyer are, in many instances, taking a substantial loss from the original purchase price.

CoreLogic says until resources investment lifts or these areas find ways to diversify their economies, it expects ongoing weakness and more home owners reselling for losses.

"It is encouraging to see a slightly lower proportion of resales at a loss over the past quarter however, instances of loss remain higher in these regions than they are across the rest of the country," the report says.

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Homes in mining hotspots are still reselling for a loss: CoreLogic

While towns linked to the resources sector are seeing heightened volumes of homes reselling at a loss, coastal lifestyle markets have generally seen a reduction in homes reselling at a loss.

Over the December 2016 quarter, the proportion of homes resold at a loss across the regions analysed was recorded at: 1.3% in Illawarra, 1.7% in Newcastle Lake Macquarie, 6.9% in Richmond-Tweed, 5.3% in Mid North Coast, 2.6% in Geelong, 24.5% in Bunbury, 24.8% in Cairns, 10.2% in Gold Coast and 9.3% in Sunshine Coast.

The proportion of homes resold at a loss fell across most of these regions over the past quarter, the exceptions were Illawarra, Newcastle and Lake Macquarie, Bunbury and Cairns.

In several regions the proportion of loss-making resales is substantially lower than it has been over recent years.

Over the quarter, Richmond-Tweed recorded its lowest proportion of loss-making resales since July 2010.

The Mid-North Coast recorded its lowest proportion of loss-making resales since April 2005.

Geelong recorded its lowest proportion of loss-making resales since February 2012.

It is anticipated that the improvement in overall housing market conditions in major coastal/lifestyle markets will continue in 2017.

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Homes in mining hotspots are still reselling for a loss: CoreLogic

From a national perspective the largest proportion of loss-making resales were located in the following regions:

  • • Mackay (Qld) (58.4%)
  • • Outback - WA (WA) (50.1%)
  • • Fitzroy (Qld) (44.3%)
  • • Townsville (Qld) (42.6%)
  • • Outback – Qld (Qld) (36.7%)
  • • Wide Bay (Qld) (30.7%)
  • • Outback – SA (30.3%)
  • • Darwin (NT) (28.0%)
  • • Outback – NT (NT) (28.0%)
  • • Cairns (Qld) (24.8%)

The lowest proportion of loss- making resales were recorded in the following regions:

  • Southern Highlands and Shoalhaven (NSW) (1.1%)
  • Illawarra (NSW) (1.3%)
  • Newcastle and Lake Macquarie (NSW) (1.7%)
  • Sydney (NSW) (1.9%)
  • Geelong (Vic) (2.6%)
  • Melbourne (Vic) (4.0%)
  • Mid North Coast (NSW) (5.3%)
  • Coffs Harbour-Grafton (NSW) (5.8%)
  • Bendigo (Vic) (5.9%)
  • Ballarat (Vic) (6.0%)

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Homes in mining hotspots are still reselling for a loss: CoreLogic

Tags: 
Regional Markets Corelogic Pain & Gain

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