Regional WA beats out regional QLD in resale race to the bottom: CoreLogic RP Data

Regional WA beats out regional QLD in resale race to the bottom: CoreLogic RP Data
Jessie RichardsonDecember 7, 2020

In the 2014 September quarter, 90.7% of properties sold in Australia recorded a profit, with 30.1% selling for more than double their purchase price, according to CoreLogic RP Data.

Regional Western Australia, however, didn't attract many of those gains. The area recorded the highest proportion of loss-making resales in the country, seeing 22.5% of resales make a loss in the September quarter.

Regional Queensland closely followed, with 22% of resales making a loss in the same period.

CoreLogic RP Data research analyst Cameron Kusher said the poor performance reflected conditions in coastal markets.

"Recent data highlights the growing weakness in markets linked to the mining and resources sector where values are generally falling," said Kusher. He also noted the high proportion of loss-making resales for units in lifestyle markets.

The average loss taken in the 2014 September quarter was $62,246, with the average gross profit $223,870.

Kusher noted that profits are often dependent on the length of holding time for a property, with a loss making property in the September quarter sold after an average of 5.7 years. Properties sold for a gross profit were held for 9.9 years on average. Vendors of homes sold for more than double their purchase price had held the properties for an average of 16.8 years.

Proportion of resales profit by length of ownership, September quarter 2014

Source: CoreLogic RP Data's September 2014 Pain and Gain Report.

Across Australia, 9.3% of all home resales attracted a lower price than what the vendors paid – the result was up from 9.0% in the June quarter. However, CoreLogic RP Data notes the proportion of resales that made a loss in the 2014 September quarter was still "much lower" than the 11% recorded in the September quarter of 2013.

Unsurprisingly, Sydney had the lowest proportion of loss-making resales of any capital city in the September 2014 quarter. Just 2.6% of resales in the New South Wales capital made a loss. Perth resales were also relatively strong, with only 6% making a loss. However, CoreLogic RP Data's Pain and Gain report recorded that losses are trending upwards in Perth.

In Melbourne, 6.5% of resales were loss-making, with the proportion of losses trending downwards.

Sydney, Melbourne, Brisbane, Adelaide and Hobart are all seeing the trend for losses decline. According to Kusher, the trend reflects value growth in those cities. Perth and Darwin and Canberra, where the proportion of loss-making resales also trended upwards, are currently seeing price conditions decline.

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