High Number of Australian Houses Selling at a Loss (First Three Months of 2019)

An increasing number of owners are reselling
their properties at a loss in Australia. Looking at data provided by the most recent
“Pain and Gain” report by property analysts CoreLogic, we can see that in the first three
months of 2019, 9.5% of houses sold at a loss, while a staggering 20.5% of units sold at
a loss. The worst performing markets, by far, were
Darwin and Perth. 45.5% of Darwin property owners sold at a
loss in the March 2019 quarter, while 32.8% of properties in Perth were loss-making. Canberra was at 10.2%, while Hobart had the
lowest percentage of loss-making resales in Australia at 2.1%. Looking at the other capital cities, 11.5%
of Brisbane properties sold at a loss in the March quarter; 9% in Sydney; 8.4% in Adelaide;
and 6.4% in Melbourne. Although looking at this graph, we can see
that it’s trending upwards. The data showed that investors were more likely
to resell their properties at a loss compared to owner-occupiers. In the first quarter of this year, 10.5% of
properties owned by owner-occupiers sold at a loss, compared to 16.7% for investment properties. CoreLogic research analyst Cameron Kusher,
had these words to say, “Clearly any property owner will aim to
make a profit from the sale of their property. In a falling market, owner-occupiers may be
more prepared to sell at a loss if they are purchasing their next home at an equivalent
or greater discount. Conversely, investors, because of taxation
rules, would seemingly be more prepared to incur a loss because they (unlike owner-occupiers)
can offset those losses against future capital gains.” Looking at Perth specifically, we can see
that almost 29% of houses sold at a loss, while a staggering 49.2% of all Perth units
were loss-making. Mr Kusher had these words to say, “You’re looking at values in Perth that
are back to levels last seen in 2007. So when you think about that, anyone who has
bought since 2007 has virtually seen no growth or seen values slightly go backwards over
that period of time.” But he did point out that it’s not necessarily
a reason for concern. He said, “Just because an owner-occupier makes a
loss, doesn’t necessarily mean they’re in financial hardship. For example, you could sell your property
at a loss, but the property you’re buying may well have fallen in value more than yours
did. So you might be upgrading into a better property.” With regards to recent interest rate cuts
and changes to lending requirements by APRA, Mr Kusher said, “It’s slightly more positive for borrowers
than it has been, but it’s not back to the days before 2014, where it was quite easy
to get a mortgage. You do have comprehensive credit reporting
coming in as well, so there’s still going to be that level of conservatism about lending. So we certainly don’t think, even in Sydney
and Melbourne, that it’s going to be a rapid rebound in the market. I think you’ll probably see the Perth market
bottom late this year or early next year. I think certainly that will bring a few more
buyers into the market. You’d have to think that there’s a bit of
pent-up demand. The point to make is even when the market
does start to recover in Perth, it’s a long way back to those previous highs.” Anyway, thank you for watching this video. It certainly looks like investors are willing
to ditch properties that they see as loss-making. Depending on where you live, it may just be
the time to scoop up a good deal. But certainly, I’m too risk-averse to start
investing in property. It’s too bumpy, and there are too many unknowns. What are your thoughts? Is it time to invest, or time to divest?

38 Replies to “High Number of Australian Houses Selling at a Loss (First Three Months of 2019)

  1. I'm in Perth, and 'this' could easily be the 'new' high, with another 10 years of declines ahead of us…just sayin. i was a real estate agent when the bust started, i got out, no way i'm telling people their house is worth a lower fictitious figure than what they paid earlier.

  2. The dishonest mainstream media and politicians who have a vested interest in keeping the housing bubble intact are gaslighting the Australian people, painting a FALSE picture of the state of the housing downturn in the hopes of increasing positive sentiment and driving demand up. Don't fall for their bullshit. Look at the video below to see how the media in Ireland lied all the way through the Irish housing crash:

    5 Years of The Irish Times Headlines Related to House Prices: https://www.youtube.com/watch?v=FtbMAPcZ0Q0&list=LLCJJpnNZKMEwML4rR8jt0yg&index=2&t=0s

  3. Im pretty sure now 90% of Australians wont buy into this market now. Most of us are expecting a major down turn.
    Whats made it worse is the major desperation of the Gov, banks and the like to keep the bubble inflated.
    This is being exposed by a lot of people now (everwhere) in every western country.

    When you simply consider the amount of money you need to borrow/payback even in this falling market, its not worth the head ache. Most young people would rather rent or go off grid instead of being a slave for a million dollar slum box in Syd,Bris or Melbourne. Sorry Baby Boomers your greed will be your generations end.

  4. All in all, I believe the credit correction is inevitable and it’s not a good scenario for a gentle landing.

  5. Yep, I'm one of these people.

    Bought a 4×2 in Warnbro (WA) in 2009 for $345,000. Was an investment property for the past 8 years.
    Renovated it, as the downturn started to kick in (end of 2014). Was hoping for $389,000 after reno's. But was advised to keep renting out until the market recovered by agent. Terrible advice – but ultimately my decision.
    Now I've got it on the market for $279,000.

    But I just want out – I've found much more joy in the share market. And I'll recover my capital quicker than if I just sit in that dog of a property market.

    Great for 1st home buyers though. Good luck to many of them!

  6. Most people when selling a house don't factor in the Sales Tax, interest paid and other things like maintenance. If all of these things were accounted for the number of vendors taking a loss would be much higher.

  7. My Sydney property has already dropped by 600 thousand from its peak,, still it's worth 1.1 million more than I payed for it, so I'm not complaining.

  8. Certain suburbs across Australia are achieving 5.5%+ net returns and with investors able to borrow under 3.8% you can have your tenants pay off your property without you needing to chip in a cent (if you have equity in another property). Even if the market does continue to drop if you have a long term view the tenant will eventually pay the property off for you and leave you with a cash flowing property that cost you nothing. In my mind good time to be buying strong cashflow property.

  9. Wait til next year and you will houses in the least desirable areas of Australia  selling for $1.

  10. The biggest difference between a professional investor and the guy in the street…
    Their capacity to realize a loss…the guys on the street will hold on hoping things will turn around…until it's far too late…

  11. This isn't the bottom, it's blatant (not-even-hiding-it-anymore) manipulation, holding the door for as long as they can. Every housing bubble that popped after the GFC had a hard landing, it won't be different this time.

  12. Buy low and sell high. Astute and savvy property speculators have already sold. Buying in a falling market is like trying to catch a falling knife. No thanks.

  13. At loss?????they rented the houses for $1,500/$1,600/$1700/
    $1,800 a month do the tax ask how much profit they make this is for landlords
    Investors,some bought the houses for $300,000.
    Reñting it for then years. At $18,000 a year is $180,000 if. He sells for $400,000 its a profit

  14. The RBA needs to lift the interest rates back to 3% to 7.25% post/pre GFC. Property needs to drop more, let it crash and burn!

  15. lol…that's what happens in a cycle….
    in the last 10 years houses have trippled and pulled back.
    perfectly logical.
    as for falling back to 2007 …that is not seen in my area….

  16. Time to invest or divest would depend on possible rental yield. The value of any investment depends on the income it can generate against the risk of the investment.

  17. I'm sorry but people who bought in the 90's have made serious gains. A 10% drop is nothing. Decent housing in Sydney and Melbourne will never be affordable again for FTBs so those wishing for a housing crash in Melbourne and Sydney are delusional. There is too much pent up demand for decent housing in decent areas and there are plenty of wealthy people around who want to by it at "perceived" inflated prices.

  18. The real crises hasn't started by a long shot but when it does the global economy will be in a death spiral and it will far exceed anything that has come before to where demonetization of dollar and the euro as well many others in saver of the SDR (blocks of credit).

  19. No government likes to talk markets dropping but looking at trade wars sanctions seems to me markets are in massive trouble and Australia does heavily rely on China and if China gets squeezed from the us then u gotta think

  20. Fake news, most areas houses are going up up up, i have 4 and laughing, all this fake bullshit news, if your, waiting for houses to get cheaper, you are dreaming

  21. Strange they found new springs of fresh water,all companies that left in last 20 years for China are coming back,Ocean has stopped rising and salinity is droping, your homes are wurth millions ,Dont believe lies ,you are going stronger every day.All the luck millioners THINK

  22. A property is meant to be a place where you live as a long term shelter from the elements, not a money making factory unless the property is dedicated to manufacturing.

  23. Have no empathy, have no understanding for those who wanted to make income by not working and draining others of life through rent. Do not buy. Let them lose more, and let more of us buy with greater ease in 2-4 years time. Do not lock in that property just because it is available, do not consider only the future of your own children. Break the eugenics game, and help more of our children who would otherwise been renters "own a property of their own". I know this is difficult for you, but think of the greater populace.

  24. dude you said it best at the end, 'depending where you live'. If you live in an average suburb, no real issues with house prices. If you over-extended, which many people did, then 'issue'… Poor management by policy makers led to a near calamity in Sydney, not talking about the rest of Australia…

  25. half the nation though they could make a quick buck , can't get nothing under 500k were i live , seriously . loose your job loose your property . all the young people i know have from 400k to 600k dept lol . economy goes bad , there will be for sale signs as far as the eye can see .

  26. If anyone is Australia is smart enough save your cash let the market drop a further buy like there's no tomorrow rent it… real estate will rise up fast your salary won't..

  27. Australia, a casino government trying to hook people into gambling and debt traps.. Soon Australia becomes a mentally country .. as a gambling country .. people gambling from expensive home loans to poker machines .. and all losers.. even smoking to reduce stress but way too expensive .. 😆 so much stress can cause serious illness like cancers.. so good luck to all gamblers.. 😆

  28. Just like dealership owners are selling average cars at a loss in Australia , there is 20% – 50% tax on cars in Australia since the 80s

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