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 the Northern Territory.
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 Darwin, the comparison for houses Vs units shows a slight difference, with 81.2% of houses re-selling for a profit and 73.4% of units having the same positive return. This is due to the oversupply of units in the city.
As for Regional NT, houses are re-selling at a very positive rate with 90% getting a positive return, while units are struggling with only 60% seeing a gain.
Investor Vs Owner Occupied
Investors in Regional NT have felt the pain more than most, with 36.4% of re-sales being made at a loss, compared to only 16.7% for properties with owner occupiers. In Darwin, the results are much closer, with investors seeing a slightly better return than owner occupiers.
Across Darwin over the three months to March 2016, 18.8% of houses and 26.6% of units resold at a loss both of which were much higher over the quarter and year. Palmerston has recorded the highest proportion of loss-making resales over the quarter (24.6%) followed by: Darwin (20.0%) and Litchfield (19.4%).
You can read the full report here.