More than one in five units and apartments sold throughout Australia are now selling at a loss, the latest data shows.
In the June Quarter edition of its Pain and Gain report, real-estate information services provider CoreLogic says 12.9 percent of properties sold throughout Australia over the June quarter were sold at a loss.
This is up from 12.1 percent in the March quarter and 9.3 percent in the June quarter of 2018.
Unit and apartment sellers are the worst impacted.
All up, 20.4 percent of multi-unit dwellings sold during the June quarter sold at a loss – up from 15.4 percent a year earlier and less than ten percent throughout most of the 2014-2017 boom period.
Nevertheless, the detached house sector is also feeling pain.
All up, 10.3 percent of all detached homes sold throughout the June quarter sold at a loss – the highest level of record since the March quarter of 2013 and up from 7.8 percent in the June quarter in 2018.
Whilst the most significant pain is being felt in mining related areas areas such as Darwin, regional Western Australia and Perth, losses are rising in inner city markets where high-rise apartments are the predominate building form.
In Melbourne, 35.6 percent of all dwellings sold within the Melbourne City municipality sold at a loss, as did 24.5 percent of those sold in the inner municipality of Stonnington.
Not surprisingly, investors bore most of the losses – a reflection of their greater exposure to inner city apartments.
Across Canberra, Brisbane and Melbourne, investors were roughly five, three and two and a half times more likely compared with owners occupiers to sell their properties at a loss.
Across Australia, property losses have intensified amid a decline in dwelling values, which remain 6.8 percent below their October 2017 peak nationally notwithstanding a recent recovery in house prices.
Despite the mounting losses, CoreLogic research director Tim Lawless says most home-owners still make a profit.
“Despite a downward trend nationally, the vast majority of homeowners continue to resell their properties for a profit, highlighting the longer term positive trend in market conditions,” Lawless said.