More loss, less profit for short term property holders
Property owners who bought within the past two years cut their losses as the heat comes out of the market and interest rates bite
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The number of Australian properties selling at a loss is on the increase, new data from CoreLogic has shown.
The CoreLogic Pain & Gain report for the June quarter revealed sales of properties sold within two years of purchase showed a significant rise in the number of those selling at a loss, up 9.7 percent compared with 2.7 percent a year ago.
CoreLogic Head of Research and report author Eliza Owen said the results reflect the turbulence of the past two years, with the market impacted by COVID and increases in the cash rate.
“Two years is a significant time period because we are two years on from the height of pandemic-related lockdowns, low interest rates, and have just passed the peak of transitions from low fixed rates to high variable rates,” Ms Owen said.
“The portion of homes sold within just two years increased by one percentage point to 8.5 percent over the past year, however the portion of these short-term resales where the seller incurred a loss has increased more substantially, from just 2.7 percent a year ago to 9.7 percent in the June quarter.
“This suggests more sellers are willing to incur a loss at the moment, which could in part be the result of high interest rates.”
The losses were felt in far greater numbers by owner/occupiers, who made up 72.1 percent of short term resales, compared with 27.9 percent for investors. Vendors in regional areas were also more likely to be feeling the pain, an indication that the treechange love affair is over for some.
“Around one in 10 regional Australian property sales were held for only up to two years,” Ms Owen said.
“A further breakdown of this data by SA4 regions shows some of the highest concentrations of short-term resales were in parts of regional Queensland, including Wide Bay (17.3 percent), the Gold Coast (15.2 percent) and the Darling Downs – Maranoa region (14.4 percent). This suggests that people might be selling up after trying to live, or invest, in more remote regional or lifestyle areas.”
In good news for potential investors, Ms Owen said the outlook for home values this year was positive.
“The rate of profit-making sales tends to follow capital growth trends,” she said. “With home values continuing to rise through July and August, we estimate the level of profitability from resales will also move higher through the September quarter.”
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A haven for hedge-fund titans and Hollywood grandees, Greenwich is one of the world’s most expensive residential enclaves, where eye-watering prices meet unapologetic grandeur.
The 7,145-square-foot apartment, with European-inspired interiors, hasn’t traded hands since it was built in 2008.
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A Denver condo that hit the market earlier this week for $16 million is now the Mile High City’s most expensive listing.
The new listing by far beats the next-priciest home for sale, a condo in a new development that was put on the market at the beginning of the year for about $9.79 million.
The city’s most expensive single-family home is asking just shy of $9 million—the metro area’s priciest single-family homes tend to be in the Cherry Hills Village suburb.
At 7,145 square feet, the newly listed unit is nearly double the size of the one in the new development and more on par with the size of some of Denver’s most expensive single-family homes.
It’s on the top floor of a seven-story mixed-use building that was built in 2008 in the Cherry Creek neighbourhood, one of the most affluent areas of the city.
The last time the three-bedroom apartment sold was before it was even completed, though it’s been owned under a few different LLCs and trusts.
The seller, who Mansion Global wasn’t able to identify, bought the condo from the developer in September 2007 for $4.047 million, records show.
The design of the interiors is European-inspired, with decorative columns, elaborate millwork and ornate built-ins.
Plus, there’s a mahogany-clad study, a formal dining room that seats up to 30 guests and views of mountains and Denver Country Club’s golf course.
A private terrace adds 1,230 square feet of outdoor living space and features a fireplace and a built-in barbecue, according to the listing with Josh Behr of LIV Sotheby’s International Realty.
A representative for Behr didn’t respond to a request for comment.
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