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Staff Reporter
Consumer confidence has increased, with 87.3 per cent of properties re-sold in Australia over the March 2013 quarter, according to a national research group.
RP Data’s latest Pain and Gain report has found the gross resale profit has totalled $9.6 billion.
Over the first quarter, 58,677 residential property resales were recorded nationally, with 12.7 per cent making a gross loss from the original purchase price, a total of $463.9 million.
Group national research director Tim Lawless said a lower interest rate environment appeared to create an increase in consumer confidence across the property market.
“We’re now seeing a lot more activity around sales compared with this time last year,” he said.
Units in lifestyle locations such as Queensland’s Gold Coast region experienced the largest resale losses, with 37.1 per cent of all March quarter resales in the area transacting at a price lower than the home was purchased for.
Regional areas, particularly those associated with the resource sectors, reported much fewer resale losses, with Queensland’s Central West,Victoria’s Loddon region, and the Kimberley and Pilbara regions of Western Australia all recording fewer than five per cent of March quarter transactions at a loss.
The biggest loss-making resales across regional Australia occurred in regional Queensland at 27.5 per cent, and in regional Western Australia at 20.2 per cent.
According to Mr Lawless, the gross capital losses experienced across the broader Queensland property market could largely be attributed to weaker conditions across the lifestyle markets, such as the Gold Coast, Sunshine Coast and in far north Queensland where the correction in home values has been more significant.
“The likelihood of making a gross profit or loss is quite different, based on the length of time a property has been owned,” said Mr Lawless. “As a stark example, of those homes that were purchased prior to 1 January 2008 (pre-global financial crisis) and were subsequently sold during the March quarter of this year, only eight per cent of resales were made at a gross loss.”
According to Mr Lawless’ findings, resales that incurred a gross loss over the March quarter had an average length of ownership of just 4.8 years.
Properties that recorded a gross profit were held for an average of 9.7 years, while those homes that recorded a gross profit of more than 100 per cent were owned for an average of 15.4 years.
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