The biggest returns on residential resales were made in years not decades as profit-making resales across Australia continue to rise.
Those who ignored residential property price speculation in early 2020 and got into the market, in the nick-of-time, are the biggest winners, according to Corelogic’s latest Pain and Gain Report.
People who held onto residential properties for two years achieved the highest annual profit return, with a median gain around $120,000.
This compared to the other end of the spectrum with properties held for more than 30 years having the highest median gain of just over $745,000.
The report showed profit-making resales rose 92.4 per cent in the September quarter despite widespread lockdowns impacting transaction volumes.
Regional sales had an even higher rate of profit from resales at 93.1 per cent, with the biggest gains made in Hobart, followed by Bendigo, Hume, the Sunshine Coast and Ballarat.
Corelogic head of research Eliza Owen said it was another remarkable result given this quarter was marked by lockdowns across Sydney, Melbourne and the ACT.
“The increase in the rate of profit-making sales is a reflection of strong capital growth across Australian dwelling markets despite Covid-induced disruptions to transaction activity,” Owen said.
“The three months to September was the fifth consecutive quarter in which the rate of profit-making sales across Australia increased.”
The report analysed around 99,000 dwelling resale transactions during the period, down from 106,000 resale events in the June quarter, which likely reflected increased restrictions in that quarter.
The national median nominal gain was $270,000 with total resale profits at $27.3 billion, while median losses were -$37,000, or a total of -$368 million.
Looking forward, profit made in the coming quarters is expected to rise, however, Owen advised caution.
“There are accumulating headwinds for property market performance in the coming months, in the form of higher supply of advertised stock, normalising interest rates, affordability constraints and the possibility of tighter lending restrictions,” Owen said.
“A downswing in Australian housing market values would ultimately impact the profitability of resales, particularly for recent purchasers.”
Article Source: www.theurbandeveloper.com
from Queensland Property Investor https://ift.tt/3FEEoRK
via IFTTT
