A "sharp correction" in house prices in mining regions due to the resources sector slowdown contributed to a rise in the percentage of home resales that were loss-making in the June quarter, RP Data has found.
According to CoreLogic RP Data's latest Pain and Gain report, the percentage of loss-making resales rose nationally during the period with regional areas bearing the most pain.
CoreLogic RP Data senior research analyst Cameron Kusher said loss-making resales had been particularly trending higher in regional areas of South Australia, Western Australia and the Northern Territory.
“Housing markets linked to the resources sector are generally seeing an increase in loss-making resales after housing market conditions in many of these locations have posted a sharp correction," he said.
But Mr Kusher said the trend elsewhere in regional Australia was flat while loss-making resales were falling in regional NSW as, nationwide, the proportion of loss-making resales [trended] lower in areas linked to tourism and lifestyle.
But while the proportion of loss-making resales ticked up to 9.1 per cent compared to 8.9 per cent in the March quarter and 8.6 per cent in the prior corresponding period, Mr Kusher said the trend over recent months was still downward, mirroring broader housing market conditions where values generally continue to rise".
The report found the average ownership length of homes resold at a loss was 5.3 years, while it was 9.9 years for those who profited from a resale.
Homes sold for more than double their previous purchase price were owned for an average of 16.4 years, and represented 30.8 per cent of all home resales across the quarter.
Sydney was again the darling of the market, recording the lowest portion of loss-making resales at 2 per cent, with Melbourne next at 5.7 per cent and regional Victoria and Perth on a par with 8.6 per cent.
The highest proportions of loss making resales were recorded in regional Western Australia with 24.5 per cent and regional Queensland with 22.5 per cent. That was followed by regional South Australia at 20.9 per cent and regional Tasmania at 19.9 per cent).
Meanwhile, during the second quarter, 7.7 per cent of houses nationwide resold for less than their previous purchase price compared to 12.6 per cent of unit resales.