Viewing by month: July 2013

Common landlord insurance pitfalls

Many property investors take out landlord insurance, but they can still run into significant problems if they don’t properly understand their cover and the common pitfalls around insurance. To provide some more information about this issue, we’ve decided to share the following piece by EBM Insurance, which appeared in the July 2013 edition of CENTURY 21’s Property Investor.

Watch out! Costly pitfalls landlords should avoid

Common insurance pitfalls could leave unsuspecting landlords hundreds of thousands of dollars out of pocket.

Brent Clarke from EBM Insurance Brokers recently launched a new e-book titled ‘12 Most Common Pitfalls When Insuring Your Rental Property’, which outlines potential traps for the unwary landlord.

“The simple fact that not all insurance is the same makes it extremely difficult to weigh up the benefits of one policy versus another,” says Brett. 

“After more than 20 years in the industry, I wanted to set down some of the key mistakes landlords make all too often when buying - or failing to buy - insurance.

“Of course, I favour EBM’s RentCover, but this book can help landlords differentiate effective from inadequate insurance policies, whether they end up choosing us or not. Often the glossiest brochure or cheapest price wins out and the landlord is left exposed.”

Brett cites a recent incident in which a St Kilda tenant “renovated” and expanded his apartment without permission. The tenant cut holes in a concrete floor and wall to access vacant neighbouring units - actions that could well have left the landlord exposed to an expensive damages claim.

In situations like this, where tenants are motivated by a desire for more space rather than spite, policies which only cover ‘malicious’ damages and not ‘accidental’ damages may not cover repairs.

 To receive the e-book, sign up to receive the RentCover Report – EBM’s property investment e-newsletter at www.rentcover.com.au.

COMMON PITFALLS TO AVOID WHEN BUYING INSURANCE

1. Buying on price alone — look for “value” not “cheap”;

2. Deliberate fire by tenants — some policies exclude this;

3. Excess — how much? And can the bond be used as payment?

4. Underinsurance — insuring for less than true replacement value;

5. Malicious damage by the tenant — is it covered?

6. Accidental damage — some insurers limit cover to the contents not the building;

7. Check the qualifying (or disqualifying rules) — beware the fine print;

8. Check for complete cover — some combined house and landlord policies offer an inadequate landlord component;

9. Court orders — do you need a court order to claim for rent default?

10. The Body Corporate already insures the property — not for liability if someone hurts themselves inside;

11. Periodic tenancies or lease continuation — some won’t pay out for claims if the written lease has expired;

12. Deciding “you don’t need insurance” — a reliable tenant and a good property manager is not enough to protect you.

For more information about landlord insurance, head to http://www.ebminsurance.com.au/


0 comments | Posted by Charles Tarbey on 30/07/2013 at 12:00 AM | Categories:

HIA-RP Data report improvements in new home building activity

The latest Housing Industry Association (HIA)-RP Data Residential Land Report suggests that there have been modest improvements in new home building activity in 2013. 

The report shows that Australia’s weighted median residential land value increased by 2.5 per cent to $198,152 in the March 2013 quarter, to be up 2.4 per cent when compared to the corresponding period in 2012. 

The median value for capital cities rose 3.2 per cent over the March 2013 quarter to $225,781 (2.9 per cent higher than in the March 2012 quarter), while the median value for regional Australia was $155,807.

Commenting on the new figures, HIA Chief Economist, Harley Dale said, “From a very low base in 2011, residential land sales have displayed only modest upward momentum, a trend reinforced by the 4.3 per cent increase observable for the March 2013 quarter.”

Mr Dale noted, however, that land prices have continued to find record highs, with Sydney and Perth leading the way significantly as the country’s two most expensive land markets.

“’It’s no coincidence that they [Sydney and Perth] are the two most highly taxed residential new home building markets in the country, due in large part to excessive taxes and charges related to land,” Mr Dale explained.

“These costs aren’t exclusive to Sydney and Perth – other capital cities are also witnessing upwards price pressures on serviceable residential land. Ensuring readily available and affordable land forms a crucial part of the wider policy challenge of addressing the excessive and inefficient tax and regulatory environment faced by the new home sector.”

According to RP Data’s Research Director, Tim Lawless, land sales are broadly starting to head in the right direction, however, affordability constraints, particularly in capital city markets, may limit the extent of the recovery. 

“The consecutive quarterly increases in land sales are certainly encouraging, albeit the rate of growth has slowed from 11.9 per cent in the December 2012 quarter to 4.3 per cent in the March 2013 quarter,” Mr Lawless said.

“With the increase in sales, there has also been a lift in land values, ongoing increases in the value of land may restrict the extent of the recovery given the already restrictive land prices in certain regions, in particular capital city markets.” 

Mr Lawless added that the increase in land sales has remained in line with the improving trend in sales across the detached house and unit markets throughout the second half of 2012 and early 2013. 

“Lower interest rates are clearly encouraging broadly improving housing market conditions and hopefully this recent momentum can continue, especially with first home buyer incentives now being directed specifically at new construction across a number of states,” Mr Lawless concluded.

For more information about the residential property market in your areas of interest, please feel free to stop by your local CENTURY 21 Real Estate office for expert and clear advice.


0 comments | Posted by Charles Tarbey on 29/07/2013 at 12:00 AM | Categories:

RP Data reveals Australia’s most buyer friendly suburbs

New research by RP Data has found that the number of suburbs in Australia where it is cheaper to buy than rent has increased to 692, representing a year-on-year increase of 387 per cent.

The bulk of this increase was driven by Sydney, where there are 73 suburbs where it is cheaper to pay off a home loan than a landlord. Other areas that showed significant increases were Brisbane and the Hunter Valley region of New South Wales, which recorded 71 suburbs and 40 suburbs respectively. 

The research looked at four different loan structures – these are broken down below, with the number of suburbs where it is cheaper to buy than rent in each category. 

1. Servicing a principal and interest loan on a variable mortgage rate: 692 suburbs;

2. Servicing an interest only loan on a variable mortgage rate: 2,778 suburbs;

3. Servicing a principal and interest loan on a three year fixed mortgage rate: 864 suburbs;

4. Servicing an interest only loan on a three year fixed mortgage rate: 3,230 suburbs.

Of the capital cities, Melbourne recorded the smallest number of suburbs, with only two suburbs meeting the criteria of being cheaper to buy than rent. Nationally, regional areas dominated the list with 440 suburbs outside of the capital cities showing a better payments schedule for buying than renting. 

“In some suburbs, it [buying] may actually be cheaper than renting, especially where we are seeing evidence of tight rental markets resulting in rental increases and lower home values. For many buyers, now may be a good time to consider either re-entering the market or buying their first home,” said RP Data’s Research Director, Tim Lawless.

For people willing to pay an extra $50 per week to buy rather than rent, another 1069 suburbs are available – largely in Sydney, Brisbane and Adelaide. 

“Across the capital cities, it is typically apartment-style housing where renting can be more expensive than paying a mortgage. The buy-in price tends to be lower compared with weekly rents, providing a narrower gap between mortgage payments and rental payments” said Mr Lawless. 

For more information about the residential property market in your areas of interest, please feel free to stop by your local CENTURY 21 Real Estate office for clear and expert advice. Additionally, if you would like to speak to a mortgage professional about suitable loan packages, please contact CENTURY 21 Home Loans.


0 comments | Posted by Charles Tarbey on 22/07/2013 at 12:00 AM | Categories:

Housing market holds opportunities for buyers

CENTURY 21 believes that Australia’s residential property market is presenting some strong purchase opportunities for prospective buyers.

“We are seeing a number of factors combine to make the national housing market a relatively attractive buying environment at present,” said Chairman and Owner of CENTURY 21 Australasia, Charles Tarbey. 

“Interest rates remain at historic lows, national stock levels have trended upwards over recent weeks and auction clearance rates are robust in several markets.

“In particular, there appear to be strong buying opportunities in discretionary spending areas where prices haven’t quite picked up yet, and at the top end of the market where price growth is generally heavily influenced by economic conditions and the success of high-net-worth individuals.”

The most recent RP Data Buy vs Rent report found that there were 692 suburbs across Australia where it was cheaper to pay a mortgage than a rental lease – a 286.6 per cent increase from the corresponding period in 2012.

“For buyers who are willing to step off the sidelines, there could be an opportunity to make some very fortuitous purchase decisions – provided that they can locate good quality stock in the right areas,” concluded Charles Tarbey.

CENTURY 21 encourages prospective buyers that are looking to purchase real estate to ensure they have obtained the appropriate professional property and finance advice before doing so.  

For more information about the residential property market in your areas of interest, please feel free to stop by your local CENTURY 21 Real Estate office for expert and clear advice.


0 comments | Posted by Charles Tarbey on 19/07/2013 at 12:00 AM | Categories:

Charles Tarbey’s market outlook

 

There is a great deal of talk at the moment about whether now is a good time to buy or sell. Australia’s real estate market has picked up in a number of areas over the first half of the year, which has led many spectators to question whether we have a full recovery underway. This is a difficult question to answer in light of the many complex variables that can impact the property market at any point in time. However, to provide some insight into the state of the market at present, we have decided to share the following article by CENTURY 21 Australasia’s Chairman and Owner, Charles Tarbey, which is being featured in the July edition of CENTURY 21’s ‘Property Investor’. We hope you find this an informative read.

 

The outlook for Australia’s property market

 

It has become relatively clear over the course of 2013 that each of Australia’s capital cities is in a different position with respect to property prices. RP Data-Rismark’s Home Value Index has shown differing house price growth between capital city markets over the first six months of the year, and many investors are likely wondering how much their properties will be worth come the start of 2014.

 

I believe that there is still a tremendous amount of buyer interest in the right locations within the right cities, and this is a critical factor that has, and should continue to, support buyer activity within certain markets.

 

There are many strong buying opportunities in discretionary spending areas where prices haven’t quite moved yet, and these prices generally won’t move until the wave kicks out from the capital cities.

 

There are also some prime buying opportunities at the top end of the market where property prices are generally heavily influenced by economic conditions and the success of high-net-worth individuals.

 

The low to mid range of the marketplace (up to $2.5 million) is also proving to be incredibly active in the right cities – these being Sydney, Melbourne and Perth.

 

The other capital cities appear to still be finding their feet. Adelaide, in particular, continues to have stock levels that could support projected immigration and population growth – one of the few capital cities in this position.

 

Melbourne is currently experiencing a few minor oversupply issues following several major land releases and a glut of apartments that have come onto the market. This is only occurring in pockets of Melbourne, however, which means the market’s overall price growth shouldn’t be impacted too heavily.

 

My belief is that any well-located area within a city should experience some price growth this year. Price growth will likely come down to marketplaces as opposed to cities in general.

 

As I’ve already mentioned, there is a great deal of interest from buyers at the moment. The availability of high quality investment product – in the right areas – appears to be the biggest issue. Stock levels have been trending upwards over the past few weeks, but supply remains substantially down on a year-on-year basis.

 

Traditionally, you would not see a winter market have an increase in stock at this time of year. However, in recent times, the seasons of real estate have effectively disappeared; the marketplace is now more subject to consumer sentiment, interest rates and economic data. Agents will generally advise against selling until springtime, however, if the right type of stock hits the market, it will likely sell regardless of the season.

 

Some would-be buyers may also be sitting on the sidelines due to negative talk regarding the Australian economy. I would caution investors to remember that there has been negative sentiment around the domestic economy for some time now – particularly from the media. And yet, our economy has not collapsed and we have not seen a housing bubble burst.

 

There are likely investors out there who held off on purchasing a property six months or a year ago, but that are now looking to make offers in a much weaker supply environment. I would say that if the economic outlook is poor at present, it’s very strong in comparison to where it has been.

 

For now, the focus for prospective purchasers should be on finding the right properties in the right areas. Interest rates are at 53-year lows, buyer interest is relatively high, but subdued consumer confidence is continuing to keep many buyers out of the market.

 

For those investors that are willing to act sooner rather than later, there could be an opportunity to make some very strong investments – provided they can locate good quality investment product in the right areas.

 

For more information about the residential property market in your areas of interest, please feel free to stop by your local CENTURY 21 Real Estate office for expert and clear advice.


0 comments | Posted by Charles Tarbey on 16/07/2013 at 12:00 AM | Categories:

Loans for new homes edge higher in May

Recently released figures from the Australian Bureau of Statistics show that lending for new homes edged higher in May 2013, with the number of loans for the construction and purchase of new owner-occupied homes increasing by 0.6 per cent to be up 18.1 per cent on a year-on-year basis.

 

HIA Economist, Diwa Hopkins, said “the figures show that new home lending to owner occupiers is continuing to consolidate the stronger gains made earlier on in the year,” but that “the current pace of improvement is still quite modest.”

 

“Looking at new home lending across the states and territories, it is encouraging to see that these improvements have been reasonably broad-based,” she added.

 

Ms Hopkins noted that “in most jurisdictions, the number of loans over the three months to May 2013 [was] substantially higher than 12 months ago.”

 

“The unfortunate exception is Tasmania, where new home lending has suffered a particularly protracted decline.”

 

In terms of lending to investors, in aggregate, the value of lending was up by 1.5 per cent in May.

 

“Much of this improvement was driven by lending for new homes, which increased by 17.2 per cent, following last month’s weak result,” said Ms Hopkins.

 

In May 2013, the seasonally adjusted number of housing finance commitments (for both new and established owner-occupied housing) increased by one per cent in New South Wales, 2.6 per cent in Victoria, 3.9 in Queensland, 0.6 per cent in South Australia, 3.4 per cent in Western Australia, 1.7 per cent in Tasmania and 4.7 per cent in the Northern Territory. The total number of housing finance commitments fell by 0.5 per cent in the Australian Capital Territory.

 

For more information about the residential property market in your areas of interest, please feel free to stop by your local CENTURY 21 Real Estate office for expert and clear advice.

 


2 comments | Posted by Charles Tarbey on 15/07/2013 at 12:00 AM | Categories:

Dwelling value data shows strong finish to the financial year

Dwelling values across Australia’s combined capital cities recorded a 1.9 per cent increase in June 2012 according to RP Data-Rismark’s Home Value Index, taking the cumulative capital gain to 3.8 per cent over the 2012/13 financial year.

According to RP Data Research Director, Tim Lawless, the capital gains recorded over the financial year highlight that lower mortgage rates have started to have a positive impact on the housing market. He noted, however, that current conditions are far removed from the buoyant conditions of the 2009/10 financial year when home values rose by almost 14 per cent. 

"At that time auction clearance rates were at a similar level to what they are now and mortgage rates were lower however, growth conditions were vastly different, Mr Lawless said.

The Index results showed that capital city dwelling values rose by 0.2 per cent of the June 2013 quarter, driven largely by a strong result in Australia’s largest capital city, Sydney. 

Melbourne and Brisbane recorded a slight fall in dwelling values over the quarter while the declines in Hobart, Darwin and Canberra were more significant.

Mr Lawless said that while there had been some natural volatility in the month-to-month readings of the RP Data-Rismark Index, the trend is much more indicative of an ongoing recovery in dwelling values. 

"Looking deeper into the Index data reveals some interesting trends across the broad price based segments of the housing market. 

"The Sydney premium housing market has gathered some pace since the beginning of the year, likely fuelled by stronger equity market conditions as well as the fact that premium priced housing markets showed a larger correction than other broad price segments. Sydney’s most expensive suburbs have seen dwelling values rise by 4.8 per cent over the past six months compared with a 3.2 per cent rise in values at the most affordable end of the market and a 4.6 per cent gain across the broad middle priced segment of the Sydney market.

"In the other major capitals, the most affordable and broad-middle priced segments of the housing market are typically showing the best value growth. Premium markets are generally showing some appreciation, but still not at the same rate as lower priced market segments.”

Mr Lawless went on to note that many other indices are also showing some movement – trends he put down to consumer uncertainty and the transition that is underway across Australia’s economy. 

"Consumer confidence also dipped over April and May before recording a rise in June, data on labour markets is jumpy and housing finance data shows hardly any improvement in the average loan size. If confidence levels remain high and labour markets continue to show a low rate of unemployment then we would expect that home values will continue to trend higher, albeit at a relatively measured pace," Mr Lawless concluded.

For more information about the residential property market in your areas of interest, please feel free to stop by your local CENTURY 21 Real Estate office for expert and clear advice.


0 comments | Posted by Charles Tarbey on 04/07/2013 at 12:00 AM | Categories:

Unchanged interest rate good news for borrowers

CENTURY 21 believes that the decision by the Reserve Bank of Australia to hold interest rates at 2.75 per cent will provide an ongoing incentive for homebuyers and investors looking to make a property purchase. 

“In a welcome decision for Australia’s residential property market, the Reserve Bank elected to keep the official cash rate on hold for a second consecutive month,” said Chairman and Owner of CENTURY 21 Australasia, Charles Tarbey.

“This is good news for those in a position to buy a property as the cash rate remains at a 53-year low and comes at a time when the housing market looks to be improving in a number of areas.” 

As part of its decision, the Reserve Bank reasoned that it was appropriate to leave the cash rate unchanged as easing financial conditions would contribute to a strengthening of growth over time, consistent with achieving the inflation target. 

The Reserve Bank’s decision follows the recent release of RP Data-Rismark’s Hedonic Home Value Index results, which showed that median home values In Australia’s capital cities rose 1.9 per cent in June, to be up 3.8 per cent throughout the 2012/13 financial year.

“In addition to rising capital city dwelling values, we are seeing many investors receiving strong rental returns in many markets across the nation, particularly in Sydney,” continued Charles Tarbey. 

“Auction clearance rates have remained strong in Sydney and Melbourne, national stock levels have increased, and there is an array of attractive finance packages on the market – factors that should encourage buying activity moving forward,” concluded Charles Tarbey.

CENTURY 21 encourages prospective buyers that are looking to purchase real estate to ensure they have obtained the appropriate professional property and finance advice before doing so.  

For more information about the residential property market in your areas of interest, please feel free to stop by your local CENTURY 21 Real Estate office for expert and clear advice. Additionally, if you would like to speak to a mortgage professional about suitable loan packages, please contact CENTURY 21 Home Loans.


0 comments | Posted by Charles Tarbey on 03/07/2013 at 12:00 AM | Categories:

Tips for growing a property portfolio quickly

Expanding a property portfolio is no easy task. Picking the right properties is hard enough, but it can also be difficult to secure finance for additional purchases. Even if you do manage to secure finance to buy more properties, using this finance in a way that maximises portfolio growth can be a challenge – especially if you’re looking to accelerate growth quickly. Chief Executive Officer of CENTURY 21 Home Loans, James Green, recently wrote an article for CENTURY 21’s Property Investor about how investors can use finance to grow a portfolio faster. 

How to use finance to grow your portfolio faster

There is little contention that now is a relatively affordable time to secure housing finance. Interest rates are currently at 53-year lows, well below their historical long-term averages, and there are variable and fixed rate packages on the market with interest rates of 4.99 per cent and 4.95 per cent, respectively. 

Fixed rates, in particular, are proving to be very popular, with almost 30 per cent of the home loan market comprising fixed rate lending in May - the second highest level of monthly fixed-rate lending on record (behind April 2013). 

There has been a substantial spike in loan applications and approvals, with CENTURY 21 Home Loans recording a 41 per cent increase in sales in May 2013 over May 2012. Recent data from the Australian Bureau of Statistics also shows that the value of investment home loans rose by a seasonally adjusted 1.1 per cent to $81.4 billion in April 2013 and internal figures from CENTURY 21 Home Loans show that investment lending made up 37 per cent of mortgage applications in May. 

The increase in investment activity is not surprising when one considers the lending environment at present; lowered interest rates have boosted opportunities for positively geared property investments and it is now cheaper to buy than rent in many suburbs across Australia.

In light of these developments, some investors may see an opportunity to grow their property portfolio faster. To make this prospect feasible, however, investors will need to have a smart and well-considered finance strategy. 

So how can you ensure that your finance strategy is conducive to accelerated portfolio growth as well as aligned with your investment appetite and personal circumstances? Here are a few key tips. 

REFINANCE YOUR CURRENT LOAN FACILITIES 

There are three key reasons why you should consider refinancing your loan facilities. Firstly, doing so will likely enable you to secure better loan deals across your existing portfolio - reducing your overall payments and providing extra capital for new investments. 

Secondly, refinancing may allow you to borrow against the equity in your existing property (or properties) to finance additional acquisitions. 

Finally, and perhaps most importantly, refinancing will necessitate a valuation of your investment portfolio, which will help you to identify what assets are and aren't performing, and to take action accordingly.

REVIEW YOUR INVESTMENT PORTFOLIO AT LEAST ONCE EVERY THREE YEARS 

Too many investors try to grow their property portfolio without clear and measurable goals, often leading to underperformance of assets and wasted time and money. It is for this reason that I recommend working with a mortgage broker and financial planner before making new investments; doing this will allow you to map out goals, timelines and strategies for not only prospective investments, but investments already in your portfolio. 

Setting goals and timelines will provide you with a tangible reference point to measure the performance of your investments over time. With these measures in place, you'll be better positioned to determine the returns on your investments and which assets are worth holding on to or letting go. 

While setting investment goals and regularly reviewing performance may seem like relatively obvious steps, they are fundamental for investors looking to grow a property portfolio quickly.

Because property is generally an asset that people hold on to for long time-periods, there is a tendency for property investors to take a back seat in terms of reviewing asset performance. If you're looking for long-term gains, regular performance reviews are arguably not as important; but if you're aiming to leverage your investments to grow your portfolio quickly, your capital should be invested in assets that are generating returns and increasing your borrowing power in the medium-term. 

In my experience, investments that break even or depreciate over the medium-term generally continue to perform poorly over the long-term. In these instances, investors would be wise to seriously question whether the asset is worth holding on to - particularly if they're looking to accelerate portfolio growth. 

Regular reviews of your investment portfolio will also help you to ascertain whether or not your asset weighting is consistent with your financial appetite. Your financial goals and risk profile may change over time and, as such, you might find yourself wanting to move between different asset classes and diversification strategies. Often these decisions will come down to your perception of market conditions and experiences with different asset types.

By reviewing your risk profile and financial appetite with a financial planner, you may be able to recalibrate your investment portfolio to have a sharper growth trajectory. There is no set period for reviewing your portfolio - however, prudent investors will conduct a review at least once every three years, if not more. 

WORK WITH A MORTAGE BROKER AND A PROPERTY-CENTRIC FINANCIAL PLANNER 

It is always wise to work with a mortgage broker and financial planner in combination to ensure that your borrowing strategy and financial plan are properly aligned and conducive to growth. But how can you identify the right mortgage broker and financial planner for your investments? 

In terms of identifying a mortgage broker, I would recommend working with someone who has at least five years' mortgage broking experience and a comprehensive understanding of the property market. To this end, it is often best to use a broker who is aligned to a property group - for instance, CENTURY 21 Home Loans. Mortgage brokers aligned with real estate groups tend to have the strongest property market knowledge and are specialised in helping people to buy properties, as opposed to refinancing and securing other loan products.

Mortgage brokers affiliated with property groups are also often able to call on favours from their real estate networks. For example, if you are a Sydney-based investor with an interest in buying in Melbourne and New York, a CENTURY 21 Home Loans broker would be able to put you in touch with brokers and real estate agents in both cities for no cost. Through the broker's network, you might also receive a variety of free services such as Comparative Market Analyses (CMAs), valuations and market advice. 

Once you've spoken to a mortgage broker to ascertain whether or not you're able to make an investment, it is wise to get the broker to refer you on to a property-centric financial planner. Why is this? Because many financial planners advise predominantly on equities and cash-style investments and, as such, often don't have particularly strong knowledge in the real estate space. 

The risk you face in approaching a non-property-centric financial planner is that they may steer you away from property investing, even if this asset class could deliver you the best results. This is why a mortgage broker can be such a valuable reference point; they will have tried and proven relationships with property-centric financial planners.

By getting a direct referral from the broker, you may end up saving yourself a considerable amount of time and money; you'll be more likely to identify a suitable financial planner at the start of the process, rather than going in blind and potentially having to pay another financial planner later down the track.

For more information on property finance options, contact a CENTURY 21 Home Loans broker today.


0 comments | Posted by Charles Tarbey on 02/07/2013 at 12:00 AM | Categories:

87.3 per cent of residential properties sold for a profit during March 2013 quarter

RP Data’s latest Pain and Gain report shows that 87.3 per cent of Australian residential properties sold for a profit during the March quarter of 2013. 

According to RP Data’s national research director, Tim Lawless, there were 58,677 residential property re-sales recorded nationally over the second quarter of 2013, with 87.3 per cent of these properties turning a gross profit relative to their original purchase price. The gross profit from these re-sales equated to $9.6 billion.

Mr Lawless noted that the likelihood of making a gross profit or loss varied based on the length of time a property had been owned. 

“As a stark example, those homes that were purchased prior to 1 January 2008 (pre-GFC), and were subsequently sold during the March quarter of this year, only eight per cent of re-sales were made at a gross loss,” explained Mr Lawless.

“For those homes that were purchased on or after 1 January 2008, the propensity to make a loss on the sale climbs substantially. Of those homes that sold over the March quarter, 25 per cent recorded a gross loss relative to the previous purchase price.”

The report showed that lifestyle regions such as the Gold Coast experienced the largest proportion of loss making re-sales, with 37.1 per cent of all March quarter re-sales transacting at a price lower than the original purchase price. 

Mr Lawless said the weakness seen in regional Queensland was mostly reflective of the significant correction in home values that had occurred within many parts of the marketplace.

In contrast, the report revealed that regional areas often associated with the resources sector recorded very low rates of loss making re-sales, with Queensland’s Central West, Victoria’s Loddon region and the Kimberley and Pilbara regions of Western Australia all recording fewer than five per cent of March quarter transactions at a loss.

The lowest proportion of loss making re-sales was recorded in Canberra (4.8 per cent), Perth (6.3 per cent), regional Northern Territory (6.8 per cent), and Sydney (7.1 per cent).

For more information about the residential property market in your areas of interest, please feel free to stop by your local CENTURY 21 Real Estate office for expert and clear advice.


0 comments | Posted by Charles Tarbey on 01/07/2013 at 12:00 AM | Categories: