Property Investors More Likely To Resell For A Loss Than Owner-Occupiers

Investment properties makes a lot of sense, particularly in a time of record low interest rates. Australians have a love affair with property, as they should because it has been very good to us. In fact in the March quarter 2019, we had $1.43 billion in gross profits from property resales.  However, there is another side to the story that you need to be aware of.

Recent Corelogic research analyses where the profits and losses come from with our property resales. Apartments are more likely to be resold at a loss than houses and investors are more likely to resell their properties at a loss than owner-occupiers.

In the March quarter this year, 20.5% of apartments resold for a loss versus 9.5% of houses.  And 10.5% of properties owned by owner-occupiers sold at a loss, compared to 16.7% for investment properties.

So while there is money to be made, you need to thoroughly research where you buy your investment property. Location is one of the most important factors. You don’t want to buy an apartment in an area where there is a glut of apartments. In a falling rental market, this will be hard to rent. So make sure you do your homework and don’t be afraid to enlist the services of a professional buyers agent if you need help.

CoreLogic Article: Number of Australian properties resold at a loss climbs to six year high

 

Bernadette Brennan is the Principal and founder of Premier Home Finders, a specialist real estate buyers agent located on Sydney's lower north shore.