Almost Four in Ten Sellers in One Australian Suburb Lost Money When They Sold Their Home

Introduction

Almost four in ten sellers in one Australian suburb lost money when they sold their home despite a double-digit surge in property values across the country. While most Aussies make money when they sell, home owners in central Melbourne have found themselves out of pocket. Apartment owners in the City of Melbourne were the hardest hit in Australia, with 38.9 per cent of homes there selling for a loss of $54,500 on average, new CoreLogic data revealed.

Property Market in Central Melbourne

Apartment owners in the City of Melbourne were hit the hardest, with 38.9 per cent of homes selling for a loss of $54,500 on average, according to new CoreLogic data. This is in stark contrast to the overall trend in the country where just one in 16 homes sold for a loss. The median house prices in Port Melbourne, next to the Docklands developments, fell by 0.1 per cent in the year to March to $1.67 million. Apartment values in the same suburb plunged 1.3 per cent to $798,563. However, these were the exceptions, as almost 95 per cent of homes across the country sold for a profit, the highest level since July 2010.

Factors Influencing Property Values

According to CoreLogic, houses generally have larger upswings in value compared to units. This is due to the value of land, development opportunities, and the relatively high volume of units being constructed through the 2010s. Despite the fact that house values tend to have greater price falls during downswings, they have maintained a premium over units. This explains why houses have consistently shown higher returns on investment compared to units.

Property Market in the City of Darwin

In the City of Darwin, a third of homes sold at a loss, with owners typically losing $70,000 on their initial investment. Larrakeyah, a suburb in Darwin, saw unit values fall by 1.6 per cent in the past year to $447,117. House values in the Darwin suburb of Wulagi fell by 0.9 per cent to $532,677, which is even lower than Darwin’s median price of $584,538. This makes Darwin the most affordable city in the country.

Property Market in Sydney

Parramatta, a suburb in Sydney, was also a poor performer, with over a quarter of homes selling at a loss. Sellers in this council area typically lost $49,750. However, houses in the City of Parramatta managed to maintain their value during the past year. In contrast, some suburbs in southwest Sydney experienced a decline in prices. For example, in Austral, prices declined by 1.8 per cent to $920,159, putting it further below greater Sydney’s median house price of $1.4 million. In the Liverpool council area, only one in eight homes sold at a loss.

Conclusion

Despite the overall positive trend in the Australian property market, there are pockets of the country where sellers have experienced losses. Central Melbourne and the City of Darwin were particularly affected, with a significant number of homes selling at a loss. Factors such as the type of property (house vs. apartment) and location play a significant role in determining the profitability of a sale. Sellers in these areas need to carefully consider market conditions and seek professional advice to maximize their chances of making a profit.