The effect of rising borrowing costs is hitting buyers, particularly those who bought late in the cycle and who have little equity in their homes.
report also shows the portion of properties resold within two years rose to 8.4 per cent in the March quarter, up from 7.9 per cent in the previous three months, despite nominal returns falling by $21,000 to $73,000 during the same period.
“So what we’re starting to see in the market is a result of property holders finally feeling the pinch and are choosing to incur a loss from resale in order to avoid particularly high mortgage repayments in the current rate-hiking environment.”The weight of rapid interest rate rises had also dented the overall profitability of Australian homes during the March quarter. Total resale profits dropped to $22.7 billion, down from $25.
This marks the third consecutive quarter of falling profitability, and coincides with ongoing declines in national home values. Nearly one in three sales in Darwin made a loss, while Sydney’s loss-making sales jumped by 1.9 percentage points to 10.7 per cent, which is the highest level since the three months to August 2009.Loss-making sales rose by 2.2 percentage points to 10.2 per cent in Melbourne and lifted by half a percentage point to 13.8 per cent in Perth.
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