Surprising city where 1 in 3 homes sold at loss

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PHOTO: Australian property market is in a corrective phase.

Almost one in three properties in the City of Melbourne sold at a loss in December, according to new property market figures.

Property analysis firm CoreLogic has released its latest Pain and Gain Report, revealing which percentage of all resales in different local government areas made a loss or profit in the December quarter.

In the Melbourne city local government area 32.3 per cent of properties sold at a loss, followed by the Melbourne suburbs of Stonnington at 13.6 per cent, Yarra at 10.7 per cent and Boroondara at 10.3 per cent.

In contrast only 5.6 per cent of properties sold at a loss in the City of Sydney.

The local government areas in Sydney which had the highest proportion of sales that sold at a loss were Parramatta (13.3 per cent), Strathfield (13.1 per cent), Ryde (11.6 per cent) and Botany Bay (11.1 per cent).

What is behind the losses in Melbourne?

The medium loss in the City of Melbourne was $60,000 and the total value lost was $13,800,749.

The losses can largely be attributed to apartments.

The losses in property sales in Melbourne’s city can be attributed to apartments, which have has prices affected by supply and Covid. Picture: David Crosling

The vast majority of loss-making sales (about 93 per cent) across Melbourne were units, and were concentrated in the City of Melbourne, Stonnington and Port Phillip, the report said.

Independent analyst Angie Zigomanis, from property advisory firm Charter Keck Cramer, told Domain apartments had “lagged behind” houses in the property market price boom.

“Markets that have been most exposed to overseas migration, and the drop in overseas migration, have struggled the most in tenant occupancy, rental growth and therefore pricing,” he said.

He also added supply had affected prices in Melbourne’s CBD with new buildings going up in recent years – calling that and Covid a “double whammy”.

Across Melbourne, including all local government areas, house resales actually had the highest rate of profitability across the greater capital city house markets.

Out of all resales, 96.1 per cent in the December quarter made a nominal gain. That was higher than in the previous quarter (95.9 per cent) and higher than the December quarter of the previous year (95.2 per cent).