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Pain and Gain Report- RP Data

By Daniel Lean

It’s that time again where Core Logic RP Data release their quarterly ‘Pain and Gain’ report, showing us a quarterly assessment of realised gross profit and loss based on dwelling re-sales over the March Quarter of 2016.

With the housing marketing being a big part of election discussions as negative gearing was on the table, the March results in the ‘Pain and Gain’ report show quite positive trends across the country and in our state of South Australia.

A vast majority of homes (90.8%) resold over the quarter did so at a profit. In fact, nearly one third (31.9%) of homes resold for more than double their previous purchase price.

“Across those homes which resold at a profit, the total value of this profit was recorded at $12.9 billion with the average gross profit recorded at $239,855.” the report shows.

Over the March 2016 quarter, 9.2% of all homes resold recorded a gross loss when compared to their previous purchase price. This figure was higher than the 8.3% at the end of 2015 and also higher than the 8.8% recorded 12 months ago.

Across the country, those homes that resold at a loss had an average length of ownership of 6.2 years. Across all sales recording a gross profit the average length of ownership was recorded at 10.2 years, while homes which sold for more than double their previous purchase price were owned for an average of 17.5 years. This shows that again property investment should be seen as a long term prospect, whether as an investor or owner occupied.

Houses Vs Units

In Adelaide, the comparison for houses Vs units shows not a significant difference, with 91.1% of houses re-selling for a profit and 89.9% of units having the same positive return.

As for Regional SA, while the figures between houses and units are still close, there was a vast difference in the percentage of re-sales making a profit in both.

Investor Vs Owner Occupied

Investors in Regional SA have felt the pain more than most, with 29.7% of re-sales being made at a loss, compared to only 19.6% for properties with owner occupiers.  In Adelaide, the results are much closer, with investors having had a slightly more painful time than owner occupiers.

Adelaide Councils

Over the March 2016 quarter, 8.9% of resales of Adelaide houses and 10.1% of units were at a gross loss, with both recording increases over the past quarter. The Light, Mallala and Walkerville council areas recorded no loss making resales over the quarter. The council areas with the highest proportion of loss-making resales over the quarter were: Playford (28.6%), Gawler (16.0%) and Adelaide (14.9%).

You can read the full report here.

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