Perth property owners continue to feel the pain

Resales at a loss in Perth have not been this high, ever: CoreLogic.
Resales at a loss in Perth have not been this high, ever: CoreLogic.

SELLERS across Perth are feeling the pain of the ongoing market decline with 32.8 per cent of properties selling at a loss in the March quarter according to the CoreLogic Pain & Gain report.

Research analyst Cameron Kusher said resales at a loss in Perth had not been this high anytime throughout CoreLogic’s records.

“Perth has continued to see values fall over the quarter and subsequently resale losses have also risen, a trend likely to continue,” he said.

Sellers in the City of Perth were the hardest hit, with 60.4 per cent of sales making a loss.

The median loss for sales in the area was $115,000.

Rockingham (39.2 per cent), Mundaring (38.9 per cent), Mandurah (38.4 per cent) and Kwinana (37.6 per cent) property markets also experienced significant resale losses.

However it was not all bad news.

In the Shire of Peppermint Grove all properties sold for a profit, with the median profit $776,250.

Only 15 per cent of properties in the City of Nedlands sold for a loss, while the Shire of Murray recorded 18.8 per cent loss-making sales.

The bad news. Source: CoreLogic.

Across Perth more units sold for a loss than houses, 49.2 per compared to 28.8 per cent.

Nationally, the figures for loss-making resales for the combined capital cities were 21.4 per or units and 8.9 per cent for houses.

Mr Kusher said when relatively few properties were selling at a loss (pain) it was a general indicator of a stronger housing market.

“On the flipside, if a higher proportion of properties are reselling at a loss, it’s a sign of weaker housing market conditions,” he said.

Perth investors were more likely to sell for a loss than home owners (44.1 per cent to 30.5 per cent).

Mr Kusher said data showed that investors continued to be more likely to resell their properties at a loss compared to owner occupiers.

“Clearly, any property owner will aim to make a profit from the sale of their property,” he 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 losses against future capital gains.”

Conditions were also tough in regional markets where 38.2 per cent of properties sold for a loss.

This included 37.3 per cent of houses and 47.4 per cent of units.

Owners again fared better than investors, with 36.8 per cent making a loss compared to 47.2 per cent.

The worst-performing region was Outback (north) WA where just over half of sales were made at a loss.

Longevity seemed to be the key to making a profit, particularly in a market like Perth, which has experienced weak conditions for a number of years.

Houses that sold for profit were owned for a median 13.1 years, while units were held for 15.2 years.

Houses resold for a loss were owned for a median 6.1 years and 6.9 years for units.

Regionally, owners who made a profit held into their homes for a median 13.6 years and units for 10.6 years.

Those making a loss for owned their properties for a median 8.0 years (houses) and 7.6 years units).

And now for the good news. Source: CoreLogic.

Sales down, but demand strong in several areas

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