The latest edition of the Pain and Gain report by CoreLogic has analysed 72,500 sales over the first quarter of 2020 and found profit-making goes down 1 per cent.
CoreLogic's Pain and Gain report has delved into the sales of 72,500 properties that took place over the first quarter of 2020 and reported its findings.
It highlights how many of these sales made a nominal loss or gain relative to the previous sale.
Nationally, the portion of profit-making sales in the March quarter fell to 87.7 per cent from 88.7 per cent in the December quarter.
At a Glance:
The total value of gross profit derived from resold dwellings was $19.8 billion.
This is down 12 per cent from the $22.5 billion gained over the December 2019 quarter, though substantially higher than the $14.3 billion in profit making sales over March 2019 when housing the housing market broadly remained in a downturn.
Source: CoreLogic
Losses totalled $908.6 million in the March quarter, up from $766 million in the December 2019 quarter.
“There has been an uplift in the portion of lossmaking sales over the March quarter," said Eliza Owen, Head of Research.
"But despite the potential for some fallout from COVID-19 at the end of the quarter, only a small portion of the loss making sales are a reflection of the onset of the pandemic.”
In the first section of the report, the underlying transaction data shows that the portion of loss-making sales stayed relatively steady with the onset of strict social distancing in late March.
This is because the volume of sales has declined, with vendors likely to hold, rather than sell, in a highly uncertain economic period.
Source: CoreLogic
CoreLogic estimates of modelled sales volumes suggests that there was a 32.4 per cent decline in transaction activity in April 2020, which then recovered over May and June.
“The Pain and Gain results over the second half of 2020 could see an increase in the portion of loss-making sales, but the volume of sales activity may be more subdued, as vendors were less likely to test the market at the height of the pandemic," said Ms Owen.
"However, assistance for mortgage holders whose jobs and incomes have been impacted by the pandemic was likely also instrumental in keeping loss making sales low.”
More details in the Pain and Gain Report
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$14.3 billion in gross resale profits for March 2019 quarter