Pain and Gain December Quarter, 2014

(1)

Pain and Gain

December Quarter, 2014

A quarterly assessment of realised gross profit and loss

based on dwelling resales over the December quarter of 2014

(2)

Over the December 2014 quarter, 8.6% of all home resales recorded a gross loss compared to their previous purchase price. The figure had fallen from 9.1% over the September 2014 quarter and was lower than the 9.6% recorded over the December 2013 quarter. The proportion of loss-making resales was at its lowest level in December 2014 since the three months to June 2011. The total value of these loss-making resales over the quarter was $418 million and the average loss was $65,435.

The data shows that the vast majority of resales (91.4%) recorded a gross profit over the quarter with 32.3% selling for more than double their original purchase price. The gross profit across all profit-making resales was $17.1 billion and the average gross profit across these resales was $251,696.

Pain/Gain results for house and unit resales over December quarter 2014

Homes purchased pre-Jan 2008 Homes purchased post-Jan 2008

Headline results:

2014 December quarter

The likelihood of making a gross profit or loss is quite different based on the length of time a property has been owned. As a stark example, those homes that were previously purchased prior to January 1st, 2008 (i.e. pre-GFC) and were subsequently sold during the December quarter of 2014, only 4.9% of resales were made at a gross loss. For those homes that were purchased on or after January 1st, 2008 the propensity to make a loss on the resale climbs substantially. Of those homes that resold over the December 2014 quarter, 14.1% recorded a gross loss relative to the previous purchase price.

To further illustrate this point, for those resales that incurred a gross loss over the December quarter, their average length of ownership was just 5.9 years. Properties that recorded a gross profit were held for an average of 10.2 years, while those homes that resold for more than double the previous purchase price were owned for an average of 16.8 years.

15.2% 12.2% 8.6% 15.2% 16.5% 32.3% 0% - 10% Loss 10% - 25% 25% - 50% 50% - 100% 100% or more 4.9% 4.1% 7.6% 13.6% 19.5% 50.4% 14.1% 24.3% 26.5% 20.7% 8.8% 5.5%

(4)

Across the nation, 8.6% of all home resales over the three months to December 2014 recorded a gross loss. This was the lowest proportion of loss-making resales nationally since the three months to June 2011. There is now a clear trend towards a lower proportion of loss-making resales which can be attributed to the fact that every capital city has seen dwelling values rise over the past twelve months.

Across the combined capital cities, the proportion of loss-making resales is much lower (5.7%) than across the combined regional areas (14.8%). Loss-making resales continue to trend lower across the combined capital cities and are now at their lowest level since the three months to April 2011. Across the combined regional markets, the proportion of loss-making resales has been fairly flat over the past nine months.

Across the individual capital cities, the proportion of loss-making resales is trending lower in Sydney, Melbourne, Brisbane and Adelaide. Across the other four capital cities, the proportion of loss-making resales has begun to trend higher. In Sydney, loss-making resales are sitting at their lowest level since late 2003 and in Melbourne they are at their lowest level since late 2011. In Brisbane, loss-making resales are at their lowest level since mid-2011 and in Adelaide they are at their lowest level since late 2011. Sydney, Melbourne, Brisbane and Adelaide have also been the strongest performing cities in terms of value growth over the past year, no doubt contributing to the reduction in loss-making resales. Across each of the regional markets except the Northern Territory, the proportion of loss-making resales was higher than within the corresponding capital city market. In Regional Queensland, Regional South Australia and Regional Tasmania more than one in every five homes resold at a loss over the quarter. Regional markets in New South Wales, Victoria and Northern Territory are performing comparatively much stronger than those across the other states. Many regional markets continue to underperform due to the long-standing (but now generally improving) weakness in coastal and lifestyle markets and the growing weakness in regions linked to the resources sector.

Sydney, which has also been the strongest market for capital growth over recent years, has recorded the lowest proportion of loss-making resales at just 2.4% over the December 2014 quarter. Other regions with a low proportion of loss-making resales were: Perth (5.5%), Melbourne (5.6%) and Regional Victoria (8.1%).

Region Loss 0% to 10% Profit 10% to 25% Profit 25% to 50% _Profit 50% to 100% _Profit 100% or more _Profit

Sydney 2.4% 3.2% 11.3% 25.1% 25.7% 32.3% Regional NSW 9.8% 14.1% 19.7% 15.9% 11.3% 29.2% Melbourne 5.6% 10.2% 13.1% 15.4% 16.8% 38.9% Regional Vic 8.1% 15.0% 18.4% 16.3% 11.3% 30.9% Brisbane 10.5% 19.4% 17.4% 14.2% 10.8% 27.7% Regional Qld 21.5% 19.1% 16.5% 11.4% 9.4% 22.1% Adelaide 8.9% 18.2% 16.9% 15.1% 12.3% 28.5% Regional SA 20.1% 17.9% 15.0% 12.5% 9.8% 24.6% Perth 5.5% 13.2% 18.8% 10.2% 9.7% 42.6% Regional WA 19.0% 12.4% 7.9% 6.7% 9.9% 44.1% Hobart 15.5% 18.3% 14.6% 11.4% 7.8% 32.4% Regional Tas 20.8% 17.3% 12.1% 10.3% 8.2% 31.3% Darwin 10.3% 15.1% 14.9% 13.5% 11.7% 34.6% Regional NT 10.2% 13.4% 12.1% 15.9% 17.2% 31.2%

Australian Capital Territory 10.8% 19.7% 14.6% 17.0% 9.5% 28.5%

The proportion of loss-making

resales continues to trend lower

Capital cities Regional areas

0% 5% 10% 15% 20% 25% 30%

(5)

Across resales of homes throughout the December 2014 quarter, those homes that were held for only a short period of time proved to be much more susceptible to loss. Although home values increased over the 2014 calendar year, 13.1% of owners who purchased and resold in the same year recorded a gross loss (resales in less than a year accounted for just 1.6% of all resales over the year). Homes resold after being held for between 3 and 5 years were the most likely to record a gross loss (17.1%) followed by those held between 5 and 7 years (15.3%). The data also reiterates the long-term nature of housing investment as well as relatively weaker growth in values over the past decade. Of those homes resold between 10 and 15 years from the previous purchase only 48.4% sold for double their original purchase price with the proportion rising to 95.0% for homes sold after 15 years of ownership.

Proportion of resales profit by length of ownership, December quarter 2014

Length of ownership Loss 0% to 10% Profit 10% to 25% Profit 25% to 50% Profit 50% to 100% Profit 100% or more Profit

Less than a year 13.1% 47.0% 19.9% 10.3% 4.7% 5.0%

1 to 3 yrs 9.4% 28.1% 31.8% 19.7% 5.5% 5.6% 3 to 5 yrs 17.1% 25.6% 26.0% 20.2% 6.3% 4.7% 5 to 7 yrs 15.3% 17.4% 23.6% 23.4% 14.2% 6.2% 7 to 10 yrs 10.5% 9.7% 16.4% 26.8% 25.8% 10.7% 10 to 15 yrs 2.9% 2.1% 5.2% 12.7% 28.7% 48.4% 15+ yrs 0.6% 0.1% 0.4% 0.7% 3.3% 95.0%

Looking across the regions of the country there is a divergence in the proportion of total resales that were at a loss and how long these homes have been owned for. In Sydney and Perth, homes previously purchased and sold over the past year were most likely to record a gross loss. In Melbourne, Adelaide, Hobart, Darwin and Canberra homes previously purchased between 2009 and 2011 were the most likely to record a gross loss. In Brisbane, homes purchased between 2007 and 2009 were more regularly sold at a loss over the past quarter. The data highlights the divergent trends across housing markets over time. Once again, the long-term nature of housing investment is evident with very few homes recording a gross loss on sale once they have been owned for more than 10 years.

Proportion of resales at a loss by length of ownership, December quarter 2014

Region Less than 1 year 1 year to 3 years 3 years to 5 years 5 years to 7 years 7 years to 10 years 10 years to 15 years 15 years or more Sydney 6.6% 2.1% 2.6% 2.2% 3.7% 2.8% 1.0% Rest of NSW 16.7% 10.1% 15.6% 15.8% 14.7% 6.0% 0.7% Melbourne 15.3% 12.3% 19.0% 6.1% 2.2% 1.1% 0.1% Rest of Vic 20.9% 16.4% 15.7% 9.5% 10.2% 2.8% 0.1% Brisbane 11.2% 8.6% 23.0% 26.7% 8.3% 0.8% 0.0% Rest of Qld 13.7% 13.6% 36.7% 45.5% 29.5% 6.7% 1.1% Adelaide 18.0% 12.4% 25.6% 14.8% 3.9% 1.4% 0.6% Rest of SA 14.3% 28.8% 41.3% 38.2% 22.4% 1.7% 0.9% Perth 13.7% 7.1% 8.7% 8.4% 8.1% 0.3% 0.0% Rest of WA 18.2% 22.7% 30.6% 36.7% 27.6% 2.1% 1.5% Hobart 30.0% 16.7% 46.2% 29.9% 9.9% 1.9% 0.0% Rest of Tas 28.6% 22.4% 52.6% 47.4% 16.4% 3.1% 0.7% Darwin 14.3% 14.9% 18.8% 10.8% 9.4% 2.1% 0.0% Rest of NT 0.0% 21.1% 25.8% 6.1% 4.5% 0.0% 0.0%

Australian Capital Territory 25.0% 28.0% 37.6% 9.2% 2.7% 1.6% 0.0%

Properties held for a short period

are much more susceptible to loss

(6)

Proportion of loss-making resales December quarter 2014 non-capital city SA4 regions and GCCSA regions, houses and units

From a regional perspective the largest proportion of loss-making resales were located in the following regions:

►Mackay (Qld) (34.7%) ►Fitzroy (Qld) (29.6%) ►Townsville (Qld) (29.1%) ►Wide Bay (Qld) (28.2%) ►Cairns (Qld) (23.6%) ►Outback (Qld) (22.9%) ►South East (Tas) (22.7%) ►Gold Coast (Qld) (21.4%) ►Wheat Belt (Qld) (21.4%) ►Outback (WA) (21.3%)

The lowest proportion of loss-making resales were recorded in the following regions:

►Sydney (NSW) (2.4%) ►Illawarra (NSW) (2.5%) ►Toowoomba (Qld) (2.7%) ►Newcastle and Lake Macquarie

(NSW) (3.4%) ►Perth (WA) (5.5%) ►Geelong (Vic) (5.6%) ►Melbourne (Vic) (5.6%) ►Ballarat (Vic) (6.5%)

►Far West and Orana (NSW) (6.9%) ►New England and North West

(NSW) (7.4%)

Unit dwellings within lifestyle markets are generally

showing the largest proportion of loss-making resales

Units Houses ACT NSW NT QLD SA TAS VIC WA 0% 10% 20% 30% 40% 50% Australian Capital Territory

Capital Region Central West Coffs Harbour - Grafton Far West and Orana Hunter Valley exc Newcastle Illawarra Mid North Coast Murray New England and North West Newcastle and Lake Macquarie Richmond - Tweed Riverina Southern Highlands and Shoalhaven Sydney Darwin Northern Territory - Outback Brisbane Cairns Darling Downs - Maranoa Fitzroy Gold Coast Mackay Queensland - Outback Sunshine Coast Toowoomba Townsville Wide Bay Adelaide Barossa - Yorke - Mid North South Australia - Outback South Australia - South East Hobart Launceston and North East South East West and North West Ballarat Bendigo Geelong Hume Latrobe - Gippsland Melbourne North West Shepparton Warrnambool and South West Bunbury Perth Western Australia - Outback Western Australia - Wheat Belt

(7)

Only 2.4% of homes resold in Sydney over the final quarter of 2014 sold at a loss, down from 3.5% a year earlier and 2.5% at the end of the previous quarter. The Botany Bay and Hunters Hill Council areas each

recorded no resales at a loss over the quarter. The Wyong (6.8%), Pittwater (6.0%) and Gosford (6.0%) council areas each recorded the highest proportions of loss-making resales throughout Sydney over the quarter.

Gross Loss-Making Sales, December quarter 2014 Gross Profit Making Sales, December quarter 2014

Region % of all sales Average hold

period Median loss Total value of loss % of all sales Average hold period Median profit Total value of profit

Ashfield 3.1% 3.1 -$72,500 -$1,027,000 96.9% 10.6 $298,000 $58,525,255 Auburn 2.1% 6.6 -$32,500 -$444,500 97.9% 8.3 $201,250 $84,462,263 Bankstown 1.9% 7.9 -$150,000 -$1,507,079 98.1% 9.3 $268,750 $149,655,524 Blacktown 1.0% 3.3 -$67,000 -$816,667 99.0% 9.7 $228,000 $259,465,038 Blue Mountains 4.9% 9.9 -$45,000 -$1,674,630 95.1% 9.5 $147,500 $65,885,662 Botany Bay 100.0% 11.3 $299,500 $27,119,623 Burwood 3.8% 3.5 -$78,000 -$181,500 96.3% 10.2 $388,000 $41,945,800 Camden 1.5% 6.4 -$28,500 -$142,000 98.5% 9.9 $162,000 $63,460,129 Campbelltown 1.6% 9.0 -$75,000 -$2,786,000 98.4% 10.3 $173,000 $144,520,050 Canada Bay 0.9% 5.6 -$157,500 -$490,000 99.1% 9.7 $340,000 $165,507,027 Canterbury 2.0% 3.8 -$178,750 -$2,208,885 98.0% 9.8 $287,500 $149,590,745 Fairfield 3.2% 12.0 -$73,500 -$1,486,998 96.8% 11.4 $267,000 $118,266,926 Gosford 6.0% 8.8 -$50,500 -$6,521,320 94.0% 9.4 $148,000 $171,901,084 Hawkesbury 3.1% 9.3 -$110,750 -$966,000 96.9% 11.8 $211,500 $73,226,773 Holroyd 2.0% 11.5 -$270,000 -$2,107,497 98.0% 10.0 $253,750 $124,723,729 Hornsby 0.2% 11.4 -$666 -$666 99.8% 11.8 $415,000 $241,272,915 Hunters Hill 100.0% 10.5 $680,000 $32,070,400 Hurstville 1.1% 5.9 -$261,000 -$591,000 98.9% 9.1 $324,000 $119,705,873 Kogarah 0.6% 15.5 -$103,334 -$103,334 99.4% 8.8 $330,000 $78,850,321 Ku-ring-gai 2.3% 6.9 -$220,000 -$4,680,500 97.7% 10.1 $502,387 $303,393,749 Lane Cove 0.6% 25.5 -$30,000 -$30,000 99.4% 9.1 $319,000 $81,179,875 Leichhardt 1.4% 8.5 -$85,000 -$815,000 98.6% 9.1 $460,500 $157,172,812 Liverpool 2.2% 7.4 -$90,750 -$1,204,833 97.8% 9.5 $205,000 $143,013,316 Manly 2.8% 6.0 -$637,500 -$3,380,000 97.2% 11.7 $445,000 $123,287,015 Marrickville 1.9% 6.9 -$60,000 -$1,120,000 98.1% 9.6 $359,000 $116,629,909 Mosman 3.3% 8.9 -$105,255 -$467,755 96.7% 9.9 $372,500 $83,260,166 North Sydney 2.4% 7.8 -$62,500 -$1,259,700 97.6% 10.6 $316,250 $169,180,536 Parramatta 2.7% 8.2 -$43,500 -$4,073,499 97.3% 9.5 $245,000 $207,213,100 Penrith 1.3% 8.8 -$58,495 -$2,365,490 98.7% 10.3 $180,000 $174,592,292 Pittwater 6.0% 6.9 -$150,000 -$2,545,333 94.0% 10.5 $335,000 $104,315,536 Randwick 2.4% 10.5 -$65,000 -$2,713,167 97.6% 10.8 $345,000 $223,027,655 Rockdale 1.1% 7.0 -$108,584 -$739,167 98.9% 9.3 $278,000 $129,204,155 Ryde 1.0% 9.0 -$46,000 -$306,000 99.0% 9.7 $359,000 $205,661,989 Strathfield 0.7% 1.0 -$253,000 -$253,000 99.3% 8.0 $228,500 $54,665,931 Sutherland Shire 1.7% 8.5 -$167,500 -$4,437,054 98.3% 11.4 $320,000 $347,712,891 Sydney 2.7% 10.7 -$143,000 -$9,805,466 97.3% 8.5 $262,000 $350,127,473

The Hills Shire 1.1% 5.2 -$99,000 -$1,164,411 98.9% 11.0 $464,000 $354,945,130

Warringah 2.4% 7.2 -$292,500 -$4,925,000 97.6% 10.4 $307,500 $267,065,104 Waverley 1.2% 9.4 -$460,000 -$2,363,000 98.8% 10.3 $400,000 $136,023,448 Willoughby 2.0% 7.8 -$245,000 -$1,461,900 98.0% 9.8 $449,250 $187,334,486 Wollondilly 4.0% 4.3 -$20,250 -$327,402 96.0% 11.2 $192,000 $40,414,438 Woollahra 2.5% 3.8 -$61,000 -$1,089,000 97.5% 11.0 $435,000 $162,678,133 Wyong 6.8% 8.8 -$49,950 -$7,080,120 93.2% 9.6 $120,000 $134,926,579

Pain & Gain:

Sydney council regions

32.3% 11.3% 25.1% 27.5% 0% - 10% Loss 10% - 25% 25% - 50% 50% - 100% 100% or more 2.4% 3.2%

(8)

5.6% of Melbourne resales over the December 2014 quarter were at a price lower than the previous purchase price, down from 6.0% a year earlier and lower than the 6.7% the previous quarter. The Murrindindi council area was the only region across the city to record no resales at a loss over the quarter while loss-making resales were also rare in Maroondah and Whitehorse (both 1.7%). The regions with the highest proportion of loss-making resales were Melbourne (17.3%), Melton (11.8%) and Whittlesea (11.0%).

Pain & Gain:

Melbourne council regions

Banyule 3.1% 5.3 -$58,250 -$1,045,500 96.9% 12.1 $263,000 $143,493,359 Bayside 4.7% 5.9 -$75,000 -$2,779,499 95.3% 12.7 $490,250 $232,544,385 Boroondara 2.7% 4.0 -$64,400 -$2,292,340 97.3% 14.2 $552,000 $370,748,916 Brimbank 9.2% 3.6 -$20,000 -$2,127,370 90.8% 11.4 $160,000 $79,931,332 Cardinia 6.6% 3.0 -$19,950 -$314,750 93.4% 7.0 $83,750 $18,913,119 Casey 3.5% 4.0 -$16,000 -$1,102,546 96.5% 10.2 $135,000 $100,229,384 Darebin 5.9% 4.1 -$17,500 -$1,693,900 94.1% 11.2 $262,000 $118,897,547 Frankston 4.8% 4.6 -$27,500 -$1,094,735 95.2% 10.2 $125,700 $78,825,584 Glen Eira 4.3% 4.6 -$27,500 -$1,743,050 95.7% 11.9 $325,900 $230,049,440 Greater Dandenong 6.3% 4.1 -$15,500 -$897,900 93.8% 11.2 $171,750 $65,082,592 Hobsons Bay 3.7% 5.0 -$44,750 -$608,103 96.3% 11.0 $210,000 $74,976,935 Hume 8.0% 4.0 -$22,000 -$1,243,499 92.0% 10.9 $110,000 $49,637,194 Kingston 4.5% 4.3 -$44,250 -$2,289,793 95.5% 12.1 $242,025 $166,188,475 Knox 2.5% 4.4 -$43,500 -$943,700 97.5% 12.8 $285,500 $141,120,703 Macedon Ranges 5.9% 2.7 -$20,000 -$200,000 94.1% 9.0 $171,500 $10,064,250 Manningham 2.3% 3.5 -$62,444 -$635,886 97.7% 14.5 $511,500 $182,832,620 Maribyrnong 6.4% 4.7 -$41,500 -$1,996,493 93.6% 9.6 $237,500 $77,285,782 Maroondah 1.7% 3.1 -$28,500 -$409,000 98.3% 10.8 $228,000 $87,374,721 Melbourne 17.3% 5.6 -$27,350 -$4,527,759 82.7% 10.0 $152,000 $108,107,048 Melton 11.8% 3.6 -$12,000 -$1,453,850 88.2% 8.5 $85,500 $22,910,655 Mitchell 6.3% 3.2 -$195,000 -$195,000 93.8% 9.5 $48,000 $1,476,002 Monash 2.4% 5.3 -$22,300 -$489,040 97.6% 12.7 $466,000 $252,161,511 Moonee Valley 4.4% 4.1 -$83,750 -$1,280,500 95.6% 12.2 $311,000 $119,282,274 Moorabool 2.3% 3.7 -$157,000 -$157,000 97.7% 7.6 $96,000 $4,244,175 Moreland 8.7% 5.1 -$36,000 -$3,308,723 91.3% 11.6 $243,000 $127,141,402 Mornington Peninsula 5.0% 4.2 -$33,000 -$3,742,340 95.0% 10.8 $203,750 $180,220,624 Murrindindi 100.0% 13.0 $91,000 $182,000 Nillumbik 3.9% 4.1 -$21,400 -$479,799 96.1% 11.8 $226,750 $43,658,590 Port Phillip 6.1% 5.0 -$56,250 -$3,753,600 93.9% 11.2 $226,000 $135,358,731 Stonnington 6.3% 4.4 -$25,000 -$995,000 93.7% 13.7 $371,500 $187,472,313 Whitehorse 1.7% 4.3 -$56,920 -$1,604,840 98.3% 13.4 $480,000 $304,349,170 Whittlesea 11.0% 3.8 -$21,000 -$1,092,090 89.0% 11.8 $130,500 $46,933,771 Wyndham 7.2% 4.3 -$12,000 -$490,289 92.8% 8.7 $93,000 $42,270,656 Yarra 7.4% 4.1 -$35,000 -$2,103,625 92.6% 11.0 $310,500 $126,814,569 Yarra Ranges 5.4% 3.6 -$41,500 -$1,149,388 94.6% 10.8 $169,743 $68,744,145 38.9% 13.1% 15.4% 16.8% 0% - 10% Loss 10% - 25% 25% - 50% 50% - 100% 100% or more 10.2% 5.6%

(9)

Across Brisbane, the proportion of loss-making resales has trended lower over recent months and was recorded at 10.5% over the December 2014 quarter, down from 10.9% the previous quarter and 13.0% a year earlier. The Brisbane Council area has a significantly lower proportion of loss-making sales compared to all other regions at 6.2%. The council areas with the highest proportion of loss-making resales were Lockyer Valley (28.6%), Scenic Rim (27.0%) and Ipswich (18.4%).

Pain & Gain:

Brisbane council regions

Brisbane 6.2% 5.3 -$27,000 -$11,631,838 93.8% 10.3 $163,500 $879,329,556 Ipswich 18.4% 5.4 -$19,500 -$2,331,700 81.6% 9.3 $68,650 $40,879,335 Lockyer Valley 28.6% 5.6 -$24,500 -$218,500 71.4% 8.8 $58,750 $1,482,968 Logan 14.6% 5.7 -$19,250 -$4,334,135 85.4% 10.5 $85,000 $100,272,733 Moreton Bay 17.4% 5.6 -$22,750 -$7,572,992 82.6% 8.6 $76,000 $123,806,651 Redland 11.4% 5.2 -$20,000 -$2,321,950 88.6% 10.1 $104,000 $67,154,480 Scenic Rim 27.0% 5.0 -$36,500 -$604,000 73.0% 8.2 $60,000 $2,796,000 Somerset 17.1% 6.0 -$35,000 -$400,529 82.9% 9.9 $93,500 $4,006,600 27.7% 17.4% 14.2% 10.8% 0% - 10% Loss 10% - 25% 25% - 50% 50% - 100% 100% or more 19.4% 10.5%

(10)

Over the December 2014 quarter, 8.9% of Adelaide resales were at a gross loss, which was the lowest proportion since the 12 months to November 2011. The proportion of loss-making resales is down from 11.9% a year earlier. The Mallala council region was the only area across the city to record no resales at a loss over the quarter, while loss making resales were also rare in Unley (1.3%), Adelaide Hills (3.4%) and Campbelltown (3.4%) council regions. Meanwhile, the Playford (23.6%), Light (12.5%) and Adelaide (12.3%) council areas recorded the highest.

Pain & Gain:

Adelaide council regions

Adelaide 12.3% 5.7 -$87,500 -$1,005,394 87.7% 9.5 $140,000 $14,555,576 Adelaide Hills 3.4% 4.7 -$24,000 -$148,148 96.6% 8.9 $124,000 $16,074,844 Burnside 6.4% 2.8 -$35,000 -$1,460,500 93.6% 9.7 $181,000 $34,963,897 Campbelltown 3.4% 5.1 -$12,000 -$496,000 96.6% 8.8 $124,100 $23,118,992 Charles Sturt 9.9% 5.0 -$17,000 -$1,198,625 90.1% 9.1 $116,250 $44,948,238 Gawler 8.5% 5.3 -$16,500 -$77,500 91.5% 9.3 $56,525 $5,425,016 Holdfast Bay 8.8% 7.0 -$22,900 -$771,200 91.2% 10.6 $190,000 $30,968,676 Light 12.5% 1.1 -$5,000 -$5,000 87.5% 8.0 $50,000 $566,450 Mallala 100.0% 8.2 $95,000 $718,050 Marion 7.1% 5.1 -$14,500 -$1,480,500 92.9% 8.6 $100,500 $31,928,511 Mitcham 5.1% 5.2 -$20,000 -$799,033 94.9% 10.2 $207,000 $39,506,445 Mount Barker 8.4% 5.5 -$15,000 -$244,500 91.6% 8.4 $63,750 $8,059,701

Norwood Payneham St Peters 7.9% 4.5 -$17,500 -$510,600 92.1% 9.0 $160,000 $23,039,288

Onkaparinga 9.7% 4.4 -$13,250 -$1,841,677 90.3% 9.3 $100,000 $61,252,669

Playford 23.6% 4.8 -$14,000 -$1,300,550 76.4% 9.4 $57,000 $12,564,700

Port Adelaide Enfield 9.9% 4.5 -$33,500 -$2,715,400 90.1% 8.8 $91,000 $38,413,794

Prospect 7.8% 3.8 -$83,475 -$349,950 92.2% 9.3 $238,750 $11,330,661

Salisbury 11.7% 5.3 -$25,000 -$1,944,450 88.3% 8.8 $84,000 $27,916,209

Tea Tree Gully 5.9% 4.4 -$30,000 -$588,500 94.1% 10.0 $112,000 $33,830,832

Unley 1.3% 6.2 -$104,750 -$209,500 98.7% 9.7 $179,888 $35,002,520 Walkerville 5.0% 3.8 -$40,000 -$40,000 95.0% 9.9 $210,000 $5,569,000 West Torrens 7.7% 5.2 -$17,500 -$636,500 92.3% 9.8 $122,500 $22,371,648 28.5% 16.9% 15.1% 12.3% 0% - 10% Loss 10% - 25% 25% - 50% 50% - 100% 100% or more 18.2% 8.9%

(11)

5.5% of resold homes across Perth in the December 2014 quarter were sold for less than the previous

purchased price compared to 5.4% the previous quarter and 4.1% a year earlier. The Canning (1.4%), Bayswater (1.8%) and Nedlands (2.0%) council areas recorded the lowest proportion of sales at a loss. The highest

proportion of loss-making resales occurred in the Peppermint Grove (50% (only 2 sales in total)), Mandurah (15.3%) and Murray (14.0%) council areas.

Pain & Gain:

Perth council regions

period

Median loss Total value of loss

% of all sales Average hold period

Median profit Total value of profit Armadale 3.9% 5.6 -$15,000 -$387,000 96.1% 8.2 $173,000 $53,157,867 Bassendean 3.2% 6.2 -$31,250 -$62,500 96.8% 9.5 $210,000 $14,625,434 Bayswater 1.8% 4.7 -$63,000 -$276,000 98.2% 9.8 $215,500 $55,732,090 Belmont 6.1% 5.8 -$35,000 -$1,084,506 93.9% 8.6 $177,000 $24,118,237 Cambridge 4.7% 5.4 -$90,000 -$580,000 95.3% 10.5 $297,500 $45,615,050 Canning 1.4% 1.9 -$14,000 -$51,000 98.6% 9.5 $298,000 $87,381,205 Claremont 10.7% 4.7 -$90,000 -$450,000 89.3% 9.8 $185,000 $8,017,900 Cockburn 5.4% 5.0 -$32,500 -$1,737,750 94.6% 8.7 $235,000 $84,634,428 Cottesloe 4.8% 4.9 -$90,000 -$90,000 95.2% 11.4 $472,500 $11,767,600 East Fremantle 4.8% 1.5 -$7,000 -$7,000 95.2% 11.1 $382,500 $9,406,300 Fremantle 9.4% 6.4 -$149,000 -$2,486,918 90.6% 8.7 $194,000 $22,781,900 Gosnells 2.4% 4.4 -$122,000 -$745,000 97.6% 8.9 $186,000 $60,846,300 Joondalup 6.4% 5.6 -$42,500 -$2,861,540 93.6% 10.2 $253,000 $144,190,136 Kalamunda 2.6% 5.7 -$50,000 -$213,500 97.4% 9.5 $238,800 $47,143,988 Kwinana 7.9% 6.0 -$9,000 -$152,500 92.1% 7.6 $133,500 $24,313,755 Mandurah 15.3% 6.3 -$40,000 -$5,981,102 84.7% 9.2 $191,000 $69,734,413 Melville 4.6% 4.2 -$178,000 -$3,731,000 95.4% 10.2 $343,500 $124,851,310 Mosman Park 3.1% 7.4 -$190,000 -$190,000 96.9% 9.5 $162,300 $9,917,334 Mundaring 5.4% 4.8 -$37,750 -$315,500 94.6% 10.0 $220,000 $25,988,500 Murray 14.0% 7.3 -$57,500 -$657,000 86.0% 8.8 $233,500 $7,992,649 Nedlands 2.0% 4.6 -$45,000 -$45,000 98.0% 11.3 $614,000 $30,449,000 Peppermint Grove 50.0% 2.8 -$15,000 -$15,000 50.0% 9.0 $440,000 $440,000 Perth 13.4% 4.7 -$30,000 -$1,328,500 86.6% 7.6 $65,000 $20,866,991 Rockingham 4.8% 5.9 -$20,000 -$923,000 95.2% 8.3 $154,500 $94,325,420 Serpentine-Jarrahdale 2.6% 4.7 -$215,000 -$430,000 97.4% 6.6 $259,500 $17,946,270 South Perth 6.1% 5.3 -$117,500 -$1,166,500 93.9% 9.6 $250,000 $47,028,500 Stirling 3.9% 4.5 -$57,500 -$2,883,000 96.1% 9.1 $180,000 $199,881,883 Subiaco 12.5% 5.9 -$85,000 -$750,000 87.5% 9.5 $255,000 $21,992,550 Swan 4.0% 5.2 -$35,750 -$1,876,000 96.0% 8.3 $215,000 $87,106,206 Victoria Park 8.7% 5.2 -$45,000 -$1,274,000 91.3% 8.8 $145,500 $26,737,165 Vincent 4.5% 5.2 -$90,000 -$405,000 95.5% 9.7 $285,000 $21,400,890 Wanneroo 4.0% 5.3 -$26,000 -$1,896,145 96.0% 7.5 $215,000 $143,774,388 42.6% 18.8% 10.2% 9.7% 0% - 10% Loss 10% - 25% 25% - 50% 50% - 100% 100% or more 13.2% 5.5%

(12)

Hobart’s historically weak housing fundamentals sees it having the highest proportion of loss-making resales of all capital cities (15.5%) over the December 2014 quarter. The proportion of loss-making resales is lower than the previous quarter (16.3%) and the previous year (16.5%). Derwent Valley (33.3%), Sorrell (24.2%) and Brighton (22.6%) council areas had the highest proportion of loss-making resales over the quarter. The proportion of loss-making resales was much lower in Hobart and Kingborough (both 11.9%) and Clarence (15.2%) council areas.

Pain & Gain:

Hobart council regions

Brighton 22.6% 4.2 -$19,500 -$108,500 77.4% 9.8 $62,250 $1,915,550 Clarence 15.2% 4.8 -$13,000 -$862,025 84.8% 10.7 $91,250 $21,817,370 Derwent Valley 33.3% 5.3 -$29,000 -$317,000 66.7% 11.0 $72,250 $1,003,750 Glenorchy 16.9% 4.8 -$11,000 -$351,500 83.1% 10.1 $94,500 $11,968,929 Hobart 11.9% 5.1 -$32,000 -$1,174,500 88.1% 10.3 $128,000 $23,099,938 Kingborough 11.9% 4.9 -$18,500 -$263,778 88.1% 10.2 $86,500 $11,223,250 Sorell 24.2% 6.9 -$32,500 -$341,000 75.8% 12.0 $137,000 $3,492,000 32.4% 14.6% 11.4% 7.8% 0% - 10% Loss 10% - 25% 25% - 50% 50% - 100% 100% or more 18.3% 15.5%

Across Darwin over the three months to December 2014, 10.3% of homes resold at a loss compared to 9.5% at the end of the previous quarter and 7.7% at the end of 2013. The proportion of loss-making resales has recently been lower and is trending higher. The relatively less developed Litchfield region recorded no loss-making resales over the quarter compared to 5.6% in Palmerston and 14.5% in Palmerston.

Pain & Gain:

Darwin council regions

period

Median loss Total value of loss

% of all sales Average hold period

Median profit Total value of profit Darwin 14.5% 5.2 -$55,000 -$4,860,493 85.5% 7.9 $200,000 $47,583,952 Litchfield 100.0% 7.6 $315,750 $11,973,245 Palmerston 5.6% 4.9 -$244,527 -$1,781,788 94.4% 6.3 $162,000 $27,437,470 34.6% 14.9% 13.5% 11.7% 0% - 10% Loss 10% - 25% 25% - 50% 100% or more 15.1% 10.3% 50% - 100%

(13)

Pain & Gain:

Canberra council regions

Over the three months to December 2014, 10.8% of Canberra homes re-sold at a loss compared to 11.7% over the previous quarter and 7.7% a year earlier.

Unincorporated ACT 10.8% 4.3 -$17,000 -$8,878,905 89.2% 10.0 $145,000 $201,929,585 28.5% 14.6% 17.0% 9.5% 0% - 10% Loss 10% - 25% 25% - 50% 100% or more 19.7% 10.8% 50% - 100%

(14)

CoreLogic RP Data is a wholly owned subsidiary of CoreLogic (NYSE: CLGX),which is the largest data and analytics company in the world with revenues of $1.3Bn USD from 50,000 business and government customers and over 1 million end users. CoreLogic RP Data provides property information, analytics and services across Australia and New Zealand and is currently developing and growing partnerships throughout Asia.

With Australia’s most comprehensive property databases, the company’s combined data offering is derived from public, contributory and proprietary sources and includes over 500 million decision points spanning over three decades of collection, providing detailed coverage of property and other encumbrances such as tenancy, location, hazard risk and related performance information. With over 11,000 customers and 120,000 end users, CoreLogic RP Data is the leading provider of property data, analytics and related services to consumers, investors, real estate, mortgage, finance, banking, insurance, developers, wealth management and government.

CoreLogic RP Data delivers value to clients through unique data, analytics, workflow technology, advisory and geo spatial services. Clients rely on CoreLogic RP Data to help identify and manage growth opportunities, improve performance and mitigate risk. CoreLogic RP Data employs over 480 people at nine locations across Australia and in New Zealand. For more information call 1300 734 318 or visit www.corelogic.com.au

Granular Data and Analytics Driving Growth in your Business

CoreLogic RP Data produces an advanced suite of housing market analytics that provides key insights for understanding housing market conditions at a granular geographic level. Granular data is often used for portfolio analysis and benchmarking, risk assessments and understanding development feasibility and market sizing. It gives industry professionals valuable modules which provide essential analytics and insights for decision making and strategy formation within the residential property asset class. We can tailor reports to suit your business requirements.

Call us on 1300 734 318 or email us at [email protected] or visit us at www.corelogic.com.au

Market Scorecard: Monitor and measure performance of an individual office or a Franchise brand month on month through a detailed view of the Real Estate Listing and Sales market share across Australia. With the ability to gather market share statistics within your active market this product is designed to identify the competing brands and

independents at a suburb, postcode, user defined territory and State level. Easily locate growth opportunities and market hotspots allowing you to view the performance of the established offices in these new areas of interest.

Market Trends: Detailed housing market indicators down to the suburb level, with data in time series or snapshot delivered monthly. CoreLogic RP Data’s Market Trends data is segmented across houses and units. The Market Trends data includes key housing market metrics such as median prices, median values, transaction volumes, rental statistics, vendor metrics such as average selling time and vendor discounting rates.

CoreLogic RP Data Indices: The suite of CoreLogic RP Data Indices range from simple market measurements such as median prices through to repeat sales indices and our flagship hedonic home value indices. The CoreLogic RP Data Hedonic index has been specifically designed to track the value of a portfolio of properties over time and is relied upon by Australian regulators and industry as the most up to date and accurate measurement of housing market performance.

Economist Pack: A suite of indices and indicators designed specifically for Australian economic commentators who require the most up to date and detailed view of housing market conditions. The economist pack includes the CoreLogic RP Data Hedonic indices for capital cities and ‘rest of state’ indices, the stratified hedonic index, hedonic total return index, auction clearance rates and median prices.

Investor Concentration Report: Understanding ownership concentrations is an important part of assessing risk. Areas with high investor concentrations are typically allocated higher risk ratings due to the over-representation of a particular segment of the market. Through a series of rules and logic, CoreLogic RP Data has flagged the likely ownership type of every residential property nationally as either owner occupied, investor owned or government owned.

Mortgage Market Trend Report: CoreLogic RP Data is in a unique position to monitor mortgage related housing market activity. Transaction volumes, dwelling values and mortgage related valuation events all comprise our Mortgage market trend report which provides an invaluable tool for mortgage industry benchmarking and strategy.

(15)

In compiling this publication, RP Data Pty Ltd trading as CoreLogic has relied upon information supplied by a number of external sources. CoreLogic does not warrant its accuracy or completeness and to the full extent allowed by law excludes liability in contract, tort or otherwise, for any loss or damage sustained by subscribers, or by any other person or body corporate arising from or in connection with the supply or use of the whole or any part of the information in this publication through any cause whatsoever and limits any liability it may have to the amount paid to CoreLogic for the supply of such information.

Queensland Data

Based on or contains data provided by the State of Queensland (Department of Natural Resources and Mines) 2015. In consideration of the State permitting use of this data you acknowledge and agree that the State gives no warranty in relation to the data (including accuracy, reliability, completeness, currency or suitability) and accepts no liability (including without limitation, liability in negligence) for any loss, damage or costs (including consequential damage) relating to any use of the data. Data must not be used for direct marketing or be used in breach of the privacy laws.

South Australian Data

This information is based on data supplied by the South Australian Government and is published by permission. The South Australian Government does not accept any responsibility for the accuracy or completeness of the published information or suitability for any purpose of the published information or the underlying data.

New South Wales Data

Contains property sales information provided under licence from the Land and Property Information (“LPI”). CoreLogic is authorised as a Property Sales Information provider by the LPI.

Victorian Data

The State of Victoria owns the copyright in the Property Sales Data which constitutes the basis of this report and

reproduction of that data in any way without the consent of the State of Victoria will constitute a breach of the Copyright Act 1968 (Cth). The State of Victoria does not warrant the accuracy or completeness of the information contained in this report and any person using or relying upon such information does so on the basis that the State of Victoria accepts no responsibility or liability whatsoever for any errors, faults, defects or omissions in the information supplied.

Western Australian Data

Based on information provided by and with the permission of the Western Australian Land Information Authority (2015) trading as Landgate.

Australian Capital Territory Data

The Territory Data is the property of the Australian Capital Territory. No part of it may in any form or by any means (electronic, mechanical, microcopying, photocopying, recording or otherwise) be reproduced, stored in a retrieval system or transmitted without prior written permission. Enquiries should be directed to: Director, Customer Services ACT Planning and Land Authority GPO Box 1908 Canberra ACT 2601.

Tasmanian Data

This product incorporates data that is copyright owned by the Crown in Right of Tasmania. The data has been used in the product with the permission of the Crown in Right of Tasmania. The Crown in Right of Tasmania and its employees and agents:

a) give no warranty regarding the data’s accuracy, completeness, currency or suitability for any particular purpose; and b) do not accept liability howsoever arising, including but not limited to negligence for any loss resulting from the use of

or reliance upon the data.

Pain and Gain December Quarter, 2014

Pain and Gain

December Quarter, 2014

A quarterly assessment of realised gross profit and loss

based on dwelling resales over the December quarter of 2014

Contents

Headline results:

2014 December quarter

The proportion of loss-making

resales continues to trend lower

Properties held for a short period

are much more susceptible to loss

Unit dwellings within lifestyle markets are generally

showing the largest proportion of loss-making resales

Pain & Gain:

Sydney council regions

Pain & Gain:

Melbourne council regions

Pain & Gain:

Brisbane council regions

Pain & Gain:

Adelaide council regions

Pain & Gain:

Perth council regions

Pain & Gain:

Hobart council regions

Pain & Gain:

Darwin council regions

Pain & Gain:

Canberra council regions

Disclaimers