Hammer blow: Property ‘flippers’ turning homes over more quickly, losing money in the process

More Australian home owners are selling up quick but failing to make a profit in the process.

Sep 21, 2023, updated Sep 21, 2023

New CoreLogic data shows the portion of owners making a loss – after selling their home within two years of buying – rose to 9.7 per cent in the June quarter, compared to 2.7 per cent in the same period of 2022.

The median amount lost on the resale was $30,000.

“We are two years on from the height of pandemic-related lockdowns, low interest rates, and have just passed the peak of transitions from low fixed rates to high variable rates,” CoreLogic’s Eliza Owen said.

“The portion of homes sold within just two years increased by one percentage point to 8.5 per cent over the past year, however the portion of these short-term resales where the seller incurred a loss has increased more substantially.”

Darwin had the most loss-making resales of the capital cities, with 34.4 per cent of homes being sold for less than they were initially bought.

Perth followed in second at 12.3 per cent, while Adelaide was the most profitable city with only 1.8 per cent of sales coming at a loss.

But those who choose not to sell are staying in their homes for longer, according to a Domain report released on Thursday.

The median tenure for houses in Australia has increased to nine years in 2023, up from seven years a decade ago.

Darwin, Sydney, Perth and Canberra all had longer tenures than the national median, while Hobart had the shortest tenure at seven years.

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“The lengthening tenure reflects the reality of significantly stretched and highly leveraged household budgets,” Domain’s Nicola Powell said.

“When you consider the transactional costs associated with buying and selling a home, such as conveyancing and stamp duty, it’s no surprise that people are becoming more cautious, even if their current property doesn’t fully meet their lifestyle needs.”

Overall, 96.3 per cent of Australian houses are being sold at a profit in 2023, the Domain report found.

That figure is as high as 99.4 per cent in Canberra and 99.3 per cent in regional Victoria.

“The proportion of profitable resales remains consistently high, a trend expected to continue as Australia’s housing market recovers,” Dr Powell said.

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