Invest
Unit sales fall as COVID-19 sets in
Investors in Australia’s two largest cities are starting to see the impact of COVID-19, with up to a third of owners selling for less, new research has revealed.
Unit sales fall as COVID-19 sets in
Investors in Australia’s two largest cities are starting to see the impact of COVID-19, with up to a third of owners selling for less, new research has revealed.
One in three apartments in Melbourne sold for less than what they were bought for during the first three months of the year, according to CoreLogic’s Pain and Gain report.
While in Sydney’s surrounding suburbs, up to one in five investors felt the pinch when selling.
The report noted that 33.6 per cent of units in the city of Melbourne were sold at a loss, with a median decline of $44,500. In greater Melbourne, 15.5 per cent of apartments sold for a loss.
“For Melbourne and parts of Victoria, the recent rise in coronavirus cases presents ongoing risk to housing market demand. Government lockdowns have been a key determinant of economic performance since the onset of the pandemic,” the report said.
“With dwelling value declines already being led by the Melbourne market, which saw dwelling value declines of 2.3 per cent in the June quarter, it is highly likely that there will be an increase in the portion of loss-making sales in the metropolitan area over the coming months.”
However, house prices in Melbourne fared much better, with only 2.7 per cent of investors selling at a loss.
Corelogic’s head of research, Eliza Owen, said, “There has been an uplift in the portion of loss-making sales over the March quarter. But despite the potential for some fallout from COVID-19 at the end of the quarter, only a small portion of the loss-making sales are a reflection of the onset of the pandemic.”
In Sydney, the council areas with the highest proportion of loss-making owners were in the suburb of Burwood, where 22.4 per cent sold for less than they were bought for, Parramatta at 15.9 per cent, and the Ryde and Strathfield areas at 13.5 per cent.
The housing market in Sydney saw a 5.5 per cent decrease in value.
“Over the March quarter, 7.6 per cent of resales saw a nominal loss across Sydney. Alongside Hobart, Sydney was the only capital city to see a decline in the portion of loss-making sales, down from 7.9 per cent in the previous quarter,” the report noted.
A separate report released by Domain showed that unit rental yields fell by 3.2 per cent (equivalent to $15 per week) over the June quarter.
Nationally, unit rentals experienced its biggest price drop in more than 15 years, marking a historic rent price fall of 3.2 per cent over the June quarter.
“Rental prices fell across most major capitals, illustrating no city was immune from the impact of coronavirus, with Sydney and Hobart units recording the steepest quarterly fall on record,” said Domain senior research analyst Dr Nicola Powell.
However, CoreLogic noted that investors nationally outperformed Sydney and Melbourne unit sales, with 87.7 per cent of homes sold at a profit in the March quarter, compared with 88.7 per cent in the December quarter, the report showed.
The total value of gross profit derived from resold dwellings was $19.8 billion. This is down 12.0 per cent from the $22.5 billion gained over the December 2019 quarter, though substantially higher than the $14.3 billion in profit-making sales over March 2019 when the housing market broadly remained in a downturn.
Losses totalled $908.6 million in the March quarter, up from $766 million in the December 2019 quarter.
About the author
About the author
Property
Should Australia cancel rental debts?
Nearly 1 million tenants across Australia could be left homeless if rental debt is not forgotten when the moratorium on evictions lifts, new research has found. ...Read more
Property
Why didn’t the Australian property market crash?
Doom and gloom headlines filled the news as soon as COVID-19 outbreak began, and Australia ultimately headed to its first recession in over 28 years, but no drastic decline was seen in the housing mar...Read more
Property
Top 20 school zones for property growth
New report from Domain revealed the top 10 primary and secondary school catchment zones, all with more than a 25 per cent house price growth year-on-year. ...Read more
Property
More Aussies ‘in tears’ during house-hunting
New research has found that 9 out of 10 Australians find the process of house-hunting more frustrating than exciting, revealing the search for “the one” is filled with frustration, stress and tear...Read more
Property
Property hotspots for young Aussies revealed
New research from Westpac revealed that the number of first home buyers looking to enter the market has more than doubled since 2019, proving that COVID-19 continues to shape Australian home ownership...Read more
Property
Aussies swap housemates for home ownership
The number of younger Australians looking to enter the property market in the next five years has doubled, as COVID-19 restrictions sees home ownership goals increase, according to research released ...Read more
Property
Falling loan deferrals prove market recovery: REIA
The reduction in loan deferral defies doom and gloom forecasts in the property market, the Real Estate Industry of Australia has said. ...Read more
Property
Why are expats returning to property market?
Expats are returning to Australia in droves, eager to put their money into safe investments. ...Read more
Property
Should Australia cancel rental debts?
Nearly 1 million tenants across Australia could be left homeless if rental debt is not forgotten when the moratorium on evictions lifts, new research has found. ...Read more
Property
Why didn’t the Australian property market crash?
Doom and gloom headlines filled the news as soon as COVID-19 outbreak began, and Australia ultimately headed to its first recession in over 28 years, but no drastic decline was seen in the housing mar...Read more
Property
Top 20 school zones for property growth
New report from Domain revealed the top 10 primary and secondary school catchment zones, all with more than a 25 per cent house price growth year-on-year. ...Read more
Property
More Aussies ‘in tears’ during house-hunting
New research has found that 9 out of 10 Australians find the process of house-hunting more frustrating than exciting, revealing the search for “the one” is filled with frustration, stress and tear...Read more
Property
Property hotspots for young Aussies revealed
New research from Westpac revealed that the number of first home buyers looking to enter the market has more than doubled since 2019, proving that COVID-19 continues to shape Australian home ownership...Read more
Property
Aussies swap housemates for home ownership
The number of younger Australians looking to enter the property market in the next five years has doubled, as COVID-19 restrictions sees home ownership goals increase, according to research released ...Read more
Property
Falling loan deferrals prove market recovery: REIA
The reduction in loan deferral defies doom and gloom forecasts in the property market, the Real Estate Industry of Australia has said. ...Read more
Property
Why are expats returning to property market?
Expats are returning to Australia in droves, eager to put their money into safe investments. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
