Darwin Suburbs – Pain or Gain?

The March quarter Pain and Gain report showed 8.9% of properties were sold at a loss from their previous sale prices, and now Core Logic has released the June results, so let’s have a look and see how we went….

Core Logic RP Data has released its June Quarter Pain and Gain report, with some interesting results showed around the country.

For those who are unfamiliar with the ‘Pain and Gain Report’, it is a…

“Quarterly analysis of homes which were resold over the quarter. It compares the most recent sale price to the previous sale price in order to determine whether the property sold at a gross profit or gross loss. It provides a proxy for the performance of each housing market and highlights the magnitude of profit or loss the typical seller of a home makes across those regions analysed.”

Across the country, the June quarter showed that 9.1% of all home sales were at a loss against their previous sale price, slightly up from the March quarter (8.9%) and also the same period last year (8.6%).

While that figure did rise, it has stayed relatively steady over the past 12 months. Across the country, those homes that resold at a loss had an average length of ownership of 5.3 years. Across all sales recording a gross profit the average length of ownership was recorded at 9.9 years, while homes which sold for more than double their previous purchase price were owned for an average of 16.4 years. Showing that investing in property should be seen as a long term gain.

While 9.1% of re-sales were transacted at a loss, the vast majority (90.9%) of properties resold over the quarter did so at a profit. In fact, 30.8% 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 $16.1 billion with the average gross profit recorded at $259,174.

Houses Vs Units

In the Darwin area, Units felt the pain with 25.3% of their re-sales coming at a loss compared to only 13.2% of homes. Following the same trend in regional NT, where 52.6% of Units saw a loss on re-sale and Houses had 20.9%.

Investor Vs Owner Occupied

Interestingly enough, owner occupied houses had a tougher time in the market over the June quarter on re-sales, with 17.9% feeling the pain in the Darwin area compared to the 12.7% of investor re-sales making a loss. In regional NT, the tables are turned with owner occupied having 25% of pain compared to investors with a larger 28.6%.

Darwin Council Regions

Across Darwin over the three months to June 2015, 17.1% of homes resold at a loss compared to 8.7% at the end of the previous quarter and 5.9% a year ago. The proportion of loss-making resales is currently at its highest level since the three months to August 2003. The relatively less developed Litchfield region has recorded the highest proportion of loss-making resales over the quarter (21.4%) compared to 17.0% in Palmerston and 16.5% in Darwin.