Investors more likely than owner occupiers to resell property at a loss: CoreLogic Pain & Gain Report

Data shows that investors continue to be more likely to resell their properties at a loss compared to owner occupiers, according to the latest data from CoreLogics Pain & Gain report for the June quarter.

They found that over the second quarter of 2019, 11.3% of properties that were owned by owner occupiers resold at a loss compared to 17.4% of investment properties.

Across each of the major regions, except for regional Victoria and regional Tasmania, a greater share of investors resold their properties at a loss than owner occupiers.

Throughout the combined capital cities, 11.5% of owner occupier properties that were resold over the second quarter of 2019 resold for a loss compared to 18.1% of investor owned properties.

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In Melbourne (5.0% vs 13.5%), Brisbane (8.3% vs 24.3%) and Canberra (4.6% vs 21.0%) investors were more than twice as likely to resell a property at a loss than owner occupiers during the quarter.

In most of the remaining capital cities, the differential in share of loss-making resales between owner occupiers and investors was fairly small.

Across the regional areas of the country, investors were more likely to resell a property for a loss (15.8%) than owner occupiers (11.1%).

The gap between owner occupied and investor owned properties reselling at a loss was generally quite small.

"Clearly, any property owner will aim to make a profit from the sale of their property," the report said.

"In a falling market owner occupiers may be more prepared to sell at a loss if they are purchasing their next home at an equivalent or greater discount.

"Conversely, investors, because of taxation rules, would seemingly be more prepared to incur a loss because they (unlike owner occupiers) can offset those loses against future capital gains.

"If home values fall, investors may be more inclined to sell at a loss and offset those losses which in turn could result in more supply becoming available for purchase at a time in which demand for housing remains below average due to recent weak conditions and tighter credit availability however, these trends have started to reverse over recent months."