Almost one in eight residential properties is now selling at a loss, the latest data has found.
Releasing its latest report, real-estate information services firm CoreLogic said that 12.1 percent of all dwellings sold throughout Australia during the March quarter were sold at a loss – up from 9.0 percent during the same period last year and representing the largest proportion of losses on record since the March quarter of 2013.
Worst affected is the multi-residential sector, where more than one in five (20.5 percent) townhouses, units and apartments sold at a loss.
Even in detached housing, however, losses have climbed from 5.6 percent of all sales in the March quarter of 2018 to almost one in ten (9.5 percent) sales in the March quarter this year.
Losses are mounting in Sydney and Melbourne notwithstanding that the largest proportion of loss making sales occurred in resource areas.
All up, Darwin had the largest share of losses as 58.2 percent of units and 40.8 percent of detached houses sold throughout the city during the quarter sold at a loss.
Losses are also heavy in Brisbane and Perth.
But losses are also trending up in Sydney and Melbourne.
In Sydney, 9 percent of all dwellings now sell at a loss – a proportion which has more than doubled since the boom years spanning 2015 until 2017.
In Melbourne, whilst 97.5 percent of detached houses sell at a profit, almost one in five (17 percent) units sold during the March quarter sold at a loss.
Pain is especially being felt in inner areas such as Melbourne City, Stonnington and Yarra, where loss making sales stand at 31.8 percent, 24.0 percent and 18.5 percent of all sales respectively.
In Sydney, 20 percent of dwellings sold in Strathfield sold at a loss during the quarter.
Losses are greatest in the investor market, which is more heavily weighted toward inner city apartments.
All up, 17 percent of investor held dwellings sold during the March quarter were sold at a loss.
This compares to only 10.5 percent for owner occupied dwellings.
In Melbourne and Brisbane, 12.6 percent and 21.9 percent of investor held dwellings sold at a loss.
This compares with only 3.5 percent and 7.9 percent losses for owner occupied dwellings in these cities respectively.
CoreLogic Research Analyst Cameron Kusher said the losses reflected a weaker housing market.
“When relatively few properties are selling at a loss (pain) it’s a general indicator of a stronger housing market,” Kusher said.
On the flipside, he said, “If a higher proportion of properties are reselling at a loss, it’s a sign of weaker housing market conditions.”