The Core Logic RP Data Pain and Gain Report showed that despite the increasing real estate prices in Australia, there are actually many areas that do not make a profit.
Real estate in Australia has been hot as of late with major cities experiencing property price hikes. However, according to a report by News.com.au, despite this massive growth there are still many places Down Under where owners are selling homes for lower rates than what they originally paid for them. In an interview, Core Logic RP Data senior data analyst Cameron Kusher said that in Australia's regional areas, the proportion of loss-making resales is higher compared to key cities.
He also added that market trends in regional areas are adapting to the proportion of loss-making resales which has decreased in places connected with lifestyle and tourism. "On the other hand, housing markets linked to the resources sector are generally seeing an increase in loss-making resales after housing market conditions in many of these locations have posted a sharp correction," he said.
Meanwhile, according to Commonwealth Bank of Australia, about one third of homeowners who made a sale in June have doubled their money. Core Logic RP Data reported that 30.8 percent of properties have been sold at twice their purchase price that generated hefty profits for owners. On the other hand, 9.1 percent of homes that were sold registered losses against their original purchase price which is an increase compared to the previous quarter at 8.9 percent. Profits reached up to $259,174 for gaining properties but for pain losses the sum reached $65,585.
Another key indicator used for the pain and gain report is that properties that has ownership length by an average of 5.3 years resulted in mostly a resale loss. On the other end of the spectrum, homes that were owned for 16.4 years more than doubled their prices when sold.