Despite the slowing property market, nine out of 10 properties still sell at a profit to their vendors according to the new Corelogic Pain and Gain report for December quarter 2017.
91.1 per cent of all property that sold during the December quarter went for a price that was above the previous purchase price, up from 90.9 per cent the preview quarter.
Houses faired better than units, 92.3 per cent of all houses resold for a gross profit, while 88.2 per cent of units were sold at profit.
“With property values continuing to increase over the final quarter of 2017, albeit at a more moderate pace, the proportion of properties resold at a profit has continued to climb,” said research analyst Cameron Kusher.
Profits earned from property resales over this period totalled $17.832 billion, compared to $442.0 million in realised losses. The majority of this profit was generated by Sydney and Melbourne, accounting for 33.1 per cent and 29.4 per cent of total profits respectively.
In comparison, Sydney and Melbourne accounted for just 11.3 per cent and 6.6 per cent of losses nationally over the quarter.
Sydney was the only region to record a greater proportion of units resold for a profit over the quarter than houses, although Hobart had an equivalent share for houses and units.
In Melbourne, units were almost 10 times more likely to resell at a loss than houses while in Brisbane units were almost 9 times more likely to resell at a loss. Canberra told a similar story, with units 7.4 more times likely to resell at a loss.
The proportion of houses reselling for a profit increased over the quarter in Regional NSW, Regional Vic, Regional WA and Regional Tas. For units, profit-making resales increased over the quarter in all regions except for Regional NT.
The market is still performing better for owner occupiers than investors, only 7.5 per cent of owner occupier property sold at a loss, compared to 11.3 per cent of investor property. Sydney was the major region were a higher proportion of investors sold at a loss than owner occupiers.
The regional areas performed even worse for investors, they were 15.3 per cent likely to sell at a loss compared to 9.8 per cent of owner occupiers.
“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. Meanwhile, investors, because of taxation rules, would seemingly be more prepared to incur a loss because they, unlike owner occupiers, can offset those loses against future capital gains, said Mr Kusher.
“If home values fall, investors may be more inclined to sell at a loss and offset those losses which in turn could result in much more supply becoming available for purchase at a time in which demand.
