Another gruesome cycle of loss making for the Australian property market, staged itself in the first three months of the year. The loss making this year was more merciless compared to the last quarter of 2018 according to a report.
For home buyers, it may have been field day, as they got homes at lower prices than ever, but for investors and sellers, it was a disappointment.
It was the highest level of loss-making sales in six years. “Australia had a total of $486.8 million in realized gross losses from resales over the March quarter, with highest share of losses nationally seen in Perth (24.8pc) and Sydney (19.9pc),” mentioned the report. $14.3 billion was the total gross profit earned by owners reselling their properties across the nation. The property reselling scene in places like Sydney and Melbourne, Australia’s most expensive, saw a dip but due to the high rates (24.3pc and 23.5pc respectively), accounted for a large percentage of overall profits.
The report analyses individual differences between property owner-occupier resales and investor resales. Property investors were more prepared for losses when compared to owners-occupiers, as they would make up for it in future investments. Across the capitals, the share of properties resold at a loss varied significantly — Sydney (9pc), Melbourne (6.4pc), Brisbane (11.5pc), Adelaide (8.4pc), Hobart (2.1pc) and Canberra (10.2pc). Meanwhile, resale losses for Perth (32.8pc) and Darwin (45.5pc) were at record levels.
Apartment resales have exceeded house resales in loss making.