{"id":40352,"date":"2022-10-01T16:33:21","date_gmt":"2022-10-01T03:33:21","guid":{"rendered":"https:\/\/propertynoise.co.nz\/au\/?p=40352"},"modified":"2022-10-01T16:33:21","modified_gmt":"2022-10-01T03:33:21","slug":"more-aussie-homes-are-selling-at-a-loss-as-rising-interest-rates-bite","status":"publish","type":"post","link":"https:\/\/propertynoise.co.nz\/au\/more-aussie-homes-are-selling-at-a-loss-as-rising-interest-rates-bite\/","title":{"rendered":"More AUSSIE homes are selling at a loss as rising interest rates BITE"},"content":{"rendered":"

PHOTO: Loss-making sales grew the fastest in Melbourne and Sydney. FILE<\/strong><\/p>\n

The number of home sellers making a profit has subsided as the property market continues its downward trend.<\/p>\n

Loss-making sales grew the fastest in\u00a0Melbourne<\/a>\u00a0and Sydney<\/a>, according to CoreLogic data, reflecting the sharper downturns in the major cities.<\/p>\n

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There was a 6.4% increase in homes sold at a loss in\u00a0Sydney\u00a0in the June quarter and a 5.3% increase in Melbourne.<\/p>\n

Home values in the two cities have fallen by 2.8% and 1.8%, respectively, during the same period.<\/p>\n

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\u201cMultiple interest rate hikes have led to a weakening in the home values in Sydney and Melbourne, however residential resale results in some cities remain strong with significant gains across almost all resales,\u201d Eliza Owen, CoreLogic\u2019s head of research, said.<\/p>\n

She said high-density, city-fringe markets were leading the downturn.<\/p>\n

\u201cRising rates may be triggering more sales decisions among investors, contributing to the increase in loss-making unit sales across the city,\u201d Owen said.<\/p>\n

Interest rates are tipped to keep rising, with both ANZ and Westpac expecting the official cash rate to soar by another 1.00 percentage point this year.<\/p>\n

Both banks are expecting another 0.50 percentage point lift in October, followed by 0.25 percentage point hikes in November and December.<\/p>\n

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Mortgage holders have endured a cumulative 1.75 percentage points in interest rate hikes since May, causing monthly repayments to rise by hundreds of dollars.<\/p>\n

Another rate hike of 0.5 percentage point would add $760 to monthly repayments on the average $500,000 loan with 25 years left to go, according to an analysis by RateCity.<\/p>\n

Successive interest rate hikes are hitting first-home owners harder than established mortgage holders, according to Equifax data.<\/p>\n

The data showed first-home buyers, who were more likely to have bought at the top of the market, were twice as likely to have fallen behind on their home loan repayments than other mortgage holders.<\/p>\n

Meanwhile, total private sector credit \u2013 or outstanding loans \u2013 as measured by the\u00a0Reserve Bank of Australia\u00a0grew by 9.3% over the year to August.<\/p>\n

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This was the fastest pace in almost 14 years.<\/p>\n

CommSec\u2019s Ryan Felsman said the strong growth reflected expansionary policy settings during the pandemic that prompted households and businesses to increase their borrowings.<\/p>\n

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