National Media Release

RP Data Weekly Property Pulse
Released: Thursday 19 June 2013

RP Data reports: 87 per cent of homes sell for a profit in Australia over first quarter of 2013
More than three quarters of all properties which re-sold in Australia over the March 2013 quarter achieved a gross re-sale profit totalling $9.6 billion according to RP Data’s latest ‘Pain and Gain’ Report. Research by group national research director Tim Lawless confirmed that 87.3 per cent of homes sold for a profit, while just 12.7 per cent of all March quarter re-sales transacted at a loss.
Lowest proportion of loss making re-sales (based on statistical divisions nationally): • Central West (Qld) (0%) • Loddon (Vic) (3.9%) • Kimberley (WA) (4.0%) • Pilbara (WA) (4.3%) • Central Highlands (Vic) (5.3%) • North West (Qld) (5.5%) • North Western (NSW) (5.9%) • Barwon (Vic) (6.3%) • Eyre (SA) (6.5%) • Northern Territory Bal (NT) (6.8%) Highest proportion of loss making resales: (based on statistical divisions nationally): • • • • • • • • • • Gold Coast (Qld) (37.1%) Far North (Qld) (35.9%) Sunshine Coast (Qld) (33.9%) Upper Great Southern (WA) (28.6%) Wide Bay Burnett (Qld) (25.7%) Richmond Tweed (NSW) (25.5%) Northern Queensland (Qld) (23.7%) Murray (NSW) (23.3%) Midlands (WA) (23.3) Lower Great Southern (WA) (23.1%)

Pain/Gain results for house and unit re-sales over March quarter 2013

Mr Lawless said a lower interest rate environment appears to be creating an increase in consumer confidence across the property market. “We’re now seeing a lot more activity around sales compared with this time last year,” he said. RP Data recorded 58,677 residential property re-sales nationally over the first quarter, of these, 12.7 per cent recorded a gross loss from the original purchase price. The gross value of the losses associated with these loss making re-sales totalled $463.9 million over the quarter. Conversely, 87.3 per cent of all March quarter re-sales recorded a gross profit relative to their original purchase price. The gross profit from these re-sales equated to $9.6 billion. Units in lifestyle locations such as Queensland’s Gold Coast region experienced the largest re-sale losses, with 37.1 per cent of all March quarter re-sales in the area transacting at a price lower than what the home was purchased for. For regional areas, particularly those associated with the resource sectors, Mr Lawless reported that there were much fewer re-sale losses, with Queensland’s Central West, Victoria’s Loddon region, and the Kimberley and Pilbara regions of Western Australia all recording fewer than 5 per cent of March quarter transactions at a loss.

Homes purchased pre-Jan 2008

Mr Lawless said, “The likelihood of making a gross profit or loss is quite different based on the length of time a property has been owned. As a stark example, those homes that were previously purchased prior to January 1st, 2008 (pre-GFC) and were subsequently sold during the March quarter of this year, only 8 per cent of re-sales were made at a gross loss.

Homes purchased post-Jan 2008

“For those homes that were purchased on, or after January 1st 2008, the propensity to make a loss on the sale climbs substantially. Of those homes that sold over the March quarter, 25 per cent recorded a gross loss relative to the previous purchase price,” he said. Mr Lawless’ findings further illustrate that for re-sales that incurred a gross loss over the March quarter, their average length of ownership was just 4.8 years. Properties that recorded a gross profit were held for an average of 9.7 years, while those homes that recorded a gross profit of more than 100 per cent were owned for an average of 15.4 years. The biggest loss-making re-sales across regional Australia occurred in regional Queensland at 27.5 per cent, and in regional Western Australia at 20.2 per cent. According to Mr Lawless, the gross capital losses experienced across the broader Queensland property market can largely be attributed to weaker conditions across the lifestyle markets such as the Gold Coast, Sunshine Coast and in Far North Queensland where the correction in home values has been more significant. For regional Western Australia, a higher proportion of loss-making re-sales occurred predominately around non-mining regions to the south, and east of Perth. In contrast, the lowest proportion of loss making re-sales is being recorded in Canberra (4.8%), Perth (6.3%), Regional Northern Territory (6.8%), and Sydney (7.1%). Ends. See attached Pain & Gain report for all details.

March quarter 2013, proportion of all re-sales by pain/gain bracket
Region Sydney, NSW Regional NSW Melbourne, VIC Regional VIC Brisbane, QLD Regional QLD Adelaide, SA Regional SA Perth, WA Regional WA Greater Hobart, TAS Regional TAS Darwin, NT Regional NT Canberra, ACT Grand Total Loss 7.1% 13.2% 9.3% 8.9% 16.9% 27.5% 14.5% 15.6% 6.3% 20.2% 17.3% 17.5% 8.6% 6.8% 4.8% 12.7% 0-10% profit 13.8% 16.5% 10.1% 15.2% 16.7% 16.9% 14.8% 17.7% 15.7% 10.1% 15.5% 14.8% 10.3% 6.1% 13.1% 14.6% 10% to 25% profit 20.9% 17.3% 12.6% 16.9% 13.3% 12.4% 12.2% 15.0% 15.9% 7.8% 13.9% 9.1% 14.5% 13.6% 16.3% 15.4% 25% to 50% profit 50% to 100% profit 20.4% 12.4% 11.6% 11.5% 17.0% 15.9% 15.6% 12.0% 13.6% 10.2% 8.6% 10.3% 15.6% 12.6% 13.4% 11.7% 7.7% 11.9% 7.5% 10.4% 9.1% 6.6% 12.0% 9.4% 14.0% 15.2% 14.4% 27.3% 19.9% 12.7% 13.8% 12.1% >=100% profit 25.3% 29.9% 35.1% 31.5% 29.4% 24.4% 30.2% 26.6% 42.4% 44.0% 37.6% 37.2% 37.3% 31.8% 33.2% 31.3%

Source: rpdata Pain and Gain report
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