As of late, South Australian home sellers have much cause for celebration. New figures are showing that more Adelaide homes are selling for a profit over the March quarter, than over the previous three months.
Pain And Gain Report
CoreLogic data in the Pain and Gain report, showed that the number of Adelaide houses selling at a profit has increased by 1.4% on the previous quarter.
The report highlighted that for the March quarter, 94.3% of homes in Adelaide sold for a considerable amount over their previous purchase price. This was up on the 92.9% from December 2016.
For units such as apartments, the figure was 87.7%. This was a 1.8% drop on the number of profit-makers for the December 2016 quarter.
CoreLogic’s latest report also found an average hold period for profit-making houses was 9.1 years. Units were held for an average of 8.7 years at a time.
Marion was Adelaide’s top performing council area – recording a 98.8% for homes sold above their previous purchasing price for the March quarter.
Prospect and Walkerville councils saw every house make a profit in December 2016. Perhaps unsurprisingly, they made a loss on that rate, with 4.8% and 5.9% respectively in March 2017.
In-Line With National Expectations
According to Cameron Kusher of CoreLogic, the results are in-line with national performance expectations. They also noted that there hasn’t ever been a quarter in which houses were resold at a loss, since 1997.
Houses are always more valuable and sought after based on the underlying land value. Units tend to take their value from their location, rather than the value of the land they sit on.
Alongside this expectation, the unit sector of the market tends to be a bit more prone to oversupply. This is another factor which is likely to weigh down the resales performance.
According to the research of CoreLogic, South Australian owner-occupiers were far more likely to make a profit than investors. This is because 94.1% of properties are selling for more than their previous price of sale.
When you compare this to investment properties, only 89.5% of investment properties sold for a profit.
The market in regional Southern Australia is far weaker. Only 80.8% of owner-occupied homes made a profit in the March 2017 quarter. Regional areas of SA also saw investment properties making a 68.8% entry to the market, with said properties only breaking even.
According to Kusher, this is still in-line with the current national market climate. They also stated that regional markets are continuing to see a downwards trend, which is likely just the result of some market softness.