More Sydneysiders are now selling their homes at a loss.
asserted
Sydneysiders → sell → loss
Those with a compelling reason to sell or looking to offload apartments are among those cutting prices.
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Those → sell → prices
The share of home owners selling their properties for less than they paid rose to 7.3 per cent in the three months to June, up from 6.3 per cent in the March quarter, Cotality data shows.
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data → sell → quarter
Upsizers willing to take a hit on their current property to get a better one in the softer market explains some of the losses, market watchers say.
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watchers → take → losses
But recent property buyers grappling with higher interest rates or legislative changes, or those selling units in denser areas like Parramatta and Strathfield also make up a proportion of Sydney’s loss-making sales.
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buyers → grapple → sales
Cotality head of research Gerard Burg said that, with Sydney leading the property market downturn, those who had purchased houses in particular and sold after a “relatively short” hold period, may find themselves at an increased risk of a loss-making sale, as opposed
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themselves → say → sale
to those who had owned for longer
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who → own → longer
“When you flip over to the units, it looks a little different,” he said.
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he → flip → units
“So, that was very much concentrated in a few different areas, and very much those ones where we’ve seen a lot of supply added very recently.”
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lot → concentrate → supply
For Sydney units, the rate of owners making losses rose to 11.4 per cent at the end of June from 9.8 per cent in the previous quarter, Cotality data shows.
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data → make → quarter
House owners selling for a loss accounted for only 1.5 per cent at the end of June, a slight rise on 1.3 per cent in the previous quarter.
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owners → sell → quarter
At the overall dwelling level, losses were “driven by the story in units,” Burg said.
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Burg → drive → units
Across Sydney, Cotality data showed the Parramatta local government area had the highest share of loss-making sales for the June quarter, with 23 per cent, followed by Ryde and Strathfield at 21 per cent each.
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area → show → cent
Norman So, principal of Belle Property Strathfield, had a recent vendor who took a loss to get a sale over the line.
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who → have → line
Another – an investor – sold a unit at auction for $941,000 to owner-occupiers, a little above the 2017 sale price of $938,500.
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Another → sell → 938,500
The vendor, So said, decided to sell after the May federal budget reforms.
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So → say → reforms
“His accountant told him to dispose of that asset because they’re worried about the tax implications,” he said, adding other property investors in the area were also considering selling after the announcement.
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investors → tell → announcement
“In physical terms, this apartment…it owes my vendor…probably $1.1 million because remember when he bought it, there’s stamp duty, there’s holding costs and he made some improvements,” So said.
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So → owe → improvements
“But, he was still happy to sell for $941,000 because if he held the property…the income is not even enough to cover the tax.”
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income → sell → tax
Anthony Landahl, managing director at mortgage broker Equilibria Finance had seen investors and owner-occupiers looking to sell, even at a loss, given a range of circumstances including affordability pressures and changing needs.
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investors → see → pressures
“In some cases they purchased off the plan two or three years ago at the market peak and they now can’t afford to, with the higher interest rates, to hold the property,” he said.
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he → purchase → property
“Or it may be an investor who’s also got a home that is now unable to now hold the investment as well as their home.”
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that → get → investment
Landahl was also seeing upsizers who bought in a peak period being prepared to take a hit on a unit, for example, to buy a larger property.
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who → see → property
“They may have initially bought in the peak, but now ... it’s an opportunity to upsize and capture a property …maybe a townhouse or a house…and essentially get a property that maybe 12 or 18 months ago they weren’t able to get,” he said.
Stephen O’Sullivan, a sales agent at BresicWhitney Lower North Shore, said there was an opportunity now for home sellers to upsize and while they may get less for their current home, the price for the “property that you’re looking to buy has come back considerably.”
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you → buy → that
Upsizers were the key group taking a hit, while those with life changes like divorce, or people who had bought property in recent years were also in the market.
O’Sullivan was recently the selling agent for a two-bedroom Artarmon unit which went for $850,000 at auction.
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which → take → auction
The vendors, now upsizing to Castle Hill, paid $925,000 in 2023.
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vendors → upsize → 2023
“The vendor...had had a baby and wanted to upsize,” he said.
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he → have → baby
“The price of what they would like to buy was affordable and attractive, and so taking a 75-grand hit for when the property that they’re looking to buy is coming back $300,000, is a sensible move, when that’s where you want to live for the next 10 years.”
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you → like → years
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