New data has revealed that despite the housing boom, nearly one in three homes in a surprising city have sold at a loss.
Nearly one in three properties in the city of Melbourne sold at a loss in December, according to new housing market figures.
Real estate analyst firm CoreLogic has released its latest Pain and Gain Reportrevealing what percentage of all resales in different local government areas made a loss or a profit in the December quarter.
In the Melbourne city local government area, 32.3% of properties were sold at a loss, followed by the Melbourne suburb of Stonnington at 13.6%, Yarra at 10.7% and Boroondara at 10.3 %.
In contrast, only 5.6% of properties were sold at a loss in the city of Sydney.
Sydney local government areas that had the highest proportion of sales at a loss were Parramatta (13.3%), Strathfield (13.1%), Ryde (11.6%) and Botany Bay (11.1%) .
What’s behind the Melbourne losses?
The average loss in the city of Melbourne was $60,000 and the total value lost was $13,800,749.
The losses can largely be attributed to apartments.
The vast majority of loss sales (around 93%) in Melbourne were units and were concentrated in the city of Melbourne, Stonnington and Port Phillip, according to the report.
Independent analyst Angie Zigomanis, of property consultancy Charter Keck Cramer, said Domain apartments had “fallen behind” houses in soaring real estate market prices.
“Markets that have been most exposed to overseas migration and declining overseas migration have suffered the most from tenant occupancy, rent growth and therefore prices,” he said. -he declares.
He also added that the supply had affected prices in Melbourne’s CBD with the construction of new buildings in recent years – calling it and Covid a “double whammy”.
In Melbourne, including all local government areas, home resales actually had the highest rate of return in major capital property markets.
Of all resales, 96.1% in the December quarter realized a nominal gain. This was higher than the previous quarter (95.9%) and higher than the December quarter of the previous year (95.2%).
Around the country
The report analyzed around 133,000 property resales that took place in the three months to December 2021.
Of these, 94.8% recorded a nominal gain over the previous purchase price.
The median nominal gain on resales nationwide was $319,000.
“Homes saw higher profitability than units, at 96.2% and 88.6% respectively,” said Eliza Owen, head of research at CoreLogic.
“Investors had a lower profitability incidence (91.4%) than owner-occupier sellers (96.7%).”
In the city of Brisbane, 8.4% of properties were sold at a loss, 4.4% in the city of Hobart, 19.2% in the city of Adelaide, 36% in the city of Darwin and 47.6 % in the city of Perth. .