The total gross value of properties resold at a profit over the September quarter was $17.7bn. This far outweighed resale losses, which totaled “just” $453.8m, according to CoreLogic’s Pain and Gain Report.
The report, which is a quarterly analysis of resold properties, examines how newly-sold properties compare to their previous purchase price. It also provides insights into the performance of markets. Typically, a low proportion of loss-making resales indicates a robust market.
The overwhelming majority (90.8%) of all properties resold transacted at a price that was equal to or over the previous purchase price. Meanwhile, the proportion of profitable resales was virtually level with the June 2017 quarter and the September 2016 quarter, both of which recorded 90.9% of resales at a profit.
Moreover, 92.6% of capital city properties resold for a profit, compared to 87.8% of regional properties.
There was a slight increase in the proportion of properties reselling for less than their previous purchase price over the first three quarters of 2017. As noted by Cameron Kusher, head of research at CoreLogic, this was largely driven by capital city markets in which the instances of loss-making resales have trended slightly higher, while the regional markets are registering a decline in loss-making resales.
“Despite ongoing commentary about the weaker unit market conditions, the Pain & Gain September quarter research showed that detached houses have actually driven the increase in loss-making resales over the first three quarters of 2017,” he said.
CoreLogic also found that the instances of loss-making resales of units is now lower than it was at the end of 2016 in a number of cities, and was steady in Sydney and Melbourne.
“With the housing market now broadly seeing a slowdown in the rate of value growth with values falling in Sydney, Mr Kusher anticipates that the instances of resales at a loss will likely continue to trend higher throughout the final quarter of 2017 and into 2018,” CoreLogic said.
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