A third of Gold Coast resales at a loss over June quarter: RP Data

The largest proportion of properties selling for a loss across the country were located on the Gold Coast, according to a new report, with 35.3% of June quarter resales selling for a loss.

RP Data's latest Pain & Gain report found the Queensland Gold Coast market to have suffered the most when looking at the prices they transacted for, said research analyst Cameron Kusher. This shows that the difficulties of investors who bought in is still being felt, with a third also having reported a loss back in March quarter results.

Across the country, however, 12% recorded a loss. The majority of these were based in 'lifestyle' regions. The gross profit made by the remaining 88% of properties totaled $12.1 billion.

The strongest re-sale conditions were seen in the resource-driven and agricultural areas, including Queensland's Central West, Victoria's Barwon and Central Highlands regions, and Perth. These areas noted a loss of less than 6%.

Making a gross profit or loss, said Kusher, is actually largely based on time in the market.

"As a stark example, homes that were purchased prior to 1st January, 2007 (pre GFC) and were then sold during the June quarter of this particular year, only 7.2 per cent of resales made at a gross loss. However, for homes purchased on or after this date, the propensity to make a loss on the sale climbed substantially," he said.

"If you look at those properties which sold at a loss over the quarter they had an average hold period of just 5 years. This highlights the long-term nature of investment in residential property and that if you chase short-term profits you are likely to be more susceptible to losses," Kusher concluded.

The report for the June 2013 quarter, which looks at where profits and gains werem made around the country, looked at a total of 69,390 residential property re-sales. The loss is based on re-sale value compared to original purchase price.

Jennifer Duke

Jennifer Duke

Jennifer Duke was a property writer at Property Observer

Community Discussion

Be the first one to comment on this article
What would you like to say about this project?