Pain & Gain For Property Resales

In the final quarter of 2013, 9.7 per cent of resales nationally recorded a gross loss from the original purchase price, according to RP Data’s Quarterly Pain and Gain report for December 2013 which was released this month.

1 In 10 Resales Result In a Loss

One in ten or 9.7% of property re-sales sold in the December quarter of 2013 resulted in a gross loss with the average negative value of each transaction being more than $63,000 according to the report.

Despite of this the 90.3% of all transactions in the December quarter of 2013 resulted in a gross profit when compared to their original purchase price. In addition, 31.8% of all resales in this same period at least doubled from their original purchase price with the average gross profit for each transition being $255,088.

Coastal & Lifestyle Properties Making Up Largest Proportion

The report also suggested that the properties making up the largest proportion of properties resulting in a gross loss were lifestyle and coastal properties.

However, statistically and historically speaking, the likelihood of a sale resulting in a gross loss differs substantially depending on the time period the property has been held.

For example; a property purchased prior to 1 January 2008 and was sold in the December quarter of 2013, only 5.5% of resales resulted in a gross loss where if the property was purchased after 1 January 2008 the likelihood of the resale resulting in a gross loss was increased quite substantially. (Source RP Data)

Auction Results:

Sydney: 83%
Melbourne: 72%
Brisbane: 50%
Adelaide: 66%

(*Source APM)

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