Home sellers in regional Australia were more likely to make a profit than their capital city counterparts in the second half of 2021, according to new analysis.<\/p>\n
According to CoreLogic, 93.1 per cent of sales in regional Australia during the September quarter of 2021 made a profit, slightly ahead of capital city sales, on 91.1 per cent.<\/p>\n
The markets with the highest rates of profitability during the quarter were Bendigo at 99.8 per cent, Hume – which encompasses Seymour and Wangaratta – at 99.5 per cent, and the Sunshine Coast and Ballarat, both recording 99.3 per cent.<\/p>\n
The analysis uses SA4 regions, the broad statistical areas used by the Australian Bureau of Statistics.<\/p>\n
Craig Tweed, principal of Bendigo-based First National Tweed Sutherland, said that the pandemic had provided a boost to values in the region.<\/p>\n
“Our market varies has been very low for a long time, really it\u2019s a sign of catch up,” he said.<\/p>\n
“I think realistically we’ve been treading water up until 2020, in the four or five years before that there wasn’t a lot of profit growth. It’s totally different now.\u201d<\/p>\n
Excluding Melbourne, Victorian dwelling sales highest rate of profitability, with just 1.2 per cent of transactions resulting in a loss.<\/p>\n
CoreLogic head of research Eliza Owen said that the high levels of profitability in regional markets were a reflection of the huge spike in values there during the pandemic.<\/p>\n
“Reflecting where we’ve seen values surge the most over the COVID period to date, sea change and tree change properties proved among the most profitable over the quarter,” she said.<\/p>\n
The figures come from an analysis of around 99,000 dwelling transactions, down from 106,000 resale events in the June quarter.<\/p>\n
To be included in the count a sale must be a resale of an existing property.<\/p>\n
The typical period that people held their properties before reselling was 8.8 years, according to Ms Owen.<\/p>\n
Mr Tweed said that was roughly the same period as the Bendigo market.<\/p>\n
The median nominal gain was $270,000 across all market, with total resale profits at $27.3 billion.<\/p>\n
Ms Owen said figures for the December quarter, not yet released, would likely show a continuation of high levels of profitability.<\/p>\n
This would likely taper in 2022, she said, due to a variety of factors.<\/p>\n
“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,\u201d she said.<\/p>\n
“A downswing in Australian housing market values would ultimately impact the profitability of resales, particularly for recent purchasers.”<\/p>\n
Mr Tweed said a lack of stock in the Bendigo market meant prices there would hold, but he expected the rate of growth to “taper a little bit” in 2022.<\/p>\n
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