Sellers in regional parts of Australia are profiting more than property sellers in capital cities, CoreLogic's Pain and Gain report found.
Hobart is the capital city with the highest rate of profit, making resales at 96.6%, while regional Victoria is the most profitable 'rest of state' region with 97.5% of homes selling for a profit in the three months to September 2020.
That's according to CoreLogic's Pain and Gain report for the September 2020 quarter.
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Nationally, property resales that made a profit increased by $5 billion since the June 2020 quarter.
Eliza Owen, CoreLogic’s Head of Research Australia, says this reflects the resilience seen in the property market throughout 2020.
“Each of the greater capital city markets, with the exception of Melbourne, saw an increase in the rate of profit making sales over the September quarter. The highest rate of profit making sales was across Hobart, which has been the case since March 2018," Ms Owen said.
“Coastal regional markets were also particularly profitable for sellers, with profit making sales representing over 95% of resales across six major coastal markets: Geelong, Illawarra, the Mid North Coast, the Newcastle Lake Macquarie region, the Richmond Tweed region and the Sunshine Coast.
"The Sunshine Coast hit a record high rate of profit making sales in the September quarter at 96.4%."
When compared with capital cities, regional property markets saw a higher portion of profit-making sales.
“The combined regional Australian market saw the rate of profit making sales increase 150 basis points, to 89.2% in the September quarter, while the rate of profitability across capital city markets expanded 30 basis points, to 87.2%," Ms Owen said.
"This also reflects the divergent performance between regional and capital city real estate markets through 2020.”
Houses rake in $100,000 more in profit than apartments
The report found there was generally a far higher rate of return for houses than for units, with houses selling for an average profit of $225,000 compared with units, which sold for an average return of $125,000.
“Profitability across both houses and units rose across Australia in the September 2020 quarter. The portion of properties sold at a loss among houses fell from 10.2% in the three months to June to 9.6%, while the portion of loss making unit sales fell from 21.4% to 19.6%," Ms Owen said.
According to the report, apartments were two times more likely to sell for less than houses in the September quarter.
Investors sell at a loss
More investors sold their property at a loss than owner occupiers, according to the report: In the September quarter, 17.1% of investment properties sold at a loss compared with 10.4% of owner occupied sales.
However, these figures are an improvement on the June quarter.
“Despite the higher rate of loss observed in investor sales in the quarter, the rate of properties re-sold at a loss was down from 18.0% in the June quarter, while the rate of loss making sales among owner occupiers was down from 11.1%," Ms Owen said.
“The only region where there was a higher incidence of loss making sales among owner occupiers was across Hobart.
"This has been a consistent trend across the past few quarters. In the three months to September, 3.2% of owner occupied resales saw a nominal loss, compared with just 1% of investor sales."
Ms Owen said the report has shown that Hobart is one of the hottest housing markets in the country.
“The relatively low level of loss making sales among both cohorts reflects the exceptional capital growth across the Hobart market."
"CoreLogic home value indices show dwelling values across Hobart have seen annualised growth of 7.9% for the 5 years to December 2020, the highest annualised growth rate of the capital city markets."