For the minority of sellers who incurred a loss, the City of Perth local government area saw the highest proportion, with 13.3 per cent of transactions resulting in an average loss of $40,000. These properties were typically held for about 12 years.
Cotality’s head of research, Eliza Owen, noted that most loss-making sales nationally are concentrated in markets yet to recover their peak values. “The top 10 markets for loss-making resales accounted for a third of all losses in the quarter, compared to one quarter over the decade average,” she told The Age. “Some owners may also be cutting their losses as conditions improve, choosing to sell after holding for long periods.”
The report also points to a narrowing gap between city and regional markets. “In the three months to August, capital city values rose 1.9 per cent, overtaking the 1.6 per cent rise in regional Australia, pointing to a further narrowing ahead,” Owen said.
Recent interest rate reductions have further boosted capital growth, with Perth’s home values climbing 3.1 per cent in the three months to August. AMP chief economist Shane Oliver said rising prices in cities like Perth, Brisbane and Adelaide are “lifting all boats”.
Owen also highlighted the impact of climate change on future property trends, following the National Climate Risk Assessment’s warning about rising sea levels. “It could influence prestige property buying decisions, and potentially even some divestment from luxury coastal markets … [and] inland tree-change areas that are subject to more intense summers as well,” she said.