PROPERTY VALUES AND VALUE OF PROFITS INCREASE IN LATE 2020, REPORTS JACOBS WELL REAL ESTATE AGENT, MORGAN OLIVER
Jacobs Well Real Estate Agent, Morgan Oliver reports on the finding presented by CoreLogic in their December 2020 quarter report which showed that the profitability of Australian real estate has increased nationwide, with the rate of profit-making resales rising to 89.9 per cent.
This result has built on pre-COVID levels, when only 87.9 per cent of transactions saw a nominal gain for the seller in the three months to February 2020 and is also higher than the 88.3 per cent result in the June 2020 quarter.
Overall, total gains from resales in the December quarter rose to $31.9 billion, up from $24.8 billion in the previous quarter.
It meant that only 10.1 per cent of properties were sold at a nominal loss — the lowest level since the July 2018 quarter, according to the report. This brings the combined losses from resales to $1 billion from last quarter’s $1.2 billion.
According to CoreLogic’s head of research, Eliza Owen, the rise in the value of profits came off the back of the rise in property values across states and territories, which was “buoyed by a cash rate reduction through November”.
“The results are particularly significant given the uplift in sales volumes in the three months to December, much of which was driven by an increase in transaction activity across Melbourne. Sales and listings increased remarkably across the city, as the economy emerged from the weakness associated with the extended lockdowns,” she added.
Ultimately, Melbourne managed the second highest rate of profit-making sales across all capital cities, at 94.3 per cent over the December quarter — an increase from the September quarter’s 93 per cent.
While Melbourne and regional Victoria’s results were strong, Hobart was the real winner over the quarter.
It recorded the highest rate of profit-making sales across all capital cities at 97.2 per cent over the December 2020 quarter, surpassing the September 2020 quarter’s 96.7 per cent, the report said.
Between houses and units nationally, houses saw more profit-making sales at 92.7 per cent, whereas units recorded 81.3 per cent of transaction making a nominal gain for the seller.
Ms Owen said that the more rapid increase in the rate of profit-making house sales over the quarter “may reflect the particularly high levels of owner-occupier and first home buyer market participation seen over the year”.
Indeed, owner-occupiers saw a higher 92.2 per cent of resales making profit at a national level, compared to 84.9 per cent among investors.
Looking ahead, Eliza Owen said that the rate of nominal gain from property sales is expected to increase further in 2021, as “values have continued to increase on a fairly broad basis through the start of the year, and the headwinds presented by COVID-19 seem to be easing month to month as a vaccine is rolled out”.
Thinking of selling? Morgan Oliver, your trusted real estate agent Jacobs Well will work with you to achieve the best results for the sale of your Jacobs Well real estate.
26 March 2021
Disclaimer:
JMO Property Group has provided the information contained in this Blog for guidance only. The information presented herein has been obtained from a variety of sources we believe to be reliable. The accuracy of this information, however, cannot be guaranteed by JMO Property Group and all parties should make their own enquiries to verify this information and the relevance to their circumstances.
