Long-Term Home Ownership Does Not Guarantee Profit When Selling
New data from Cotality’s Pain and Gain Report challenges the conventional wisdom that holding property for extended periods ensures financial gain. While 95.9% of Australian dwellings sold in the December quarter yielded a nominal profit, the hold periods for loss-making sellers (8.2 years) were nearly identical to those selling at a profit (9.2 years). Houses outperformed units, with 98.1% of house resales recording profits compared to 91.2% of units. Experts highlight that market dynamics, such as oversupply in high-density areas like Parramatta, can depress values regardless of holding duration. Buyers’ agent Michelle May notes that generic units and off-the-plan properties are particularly risky, often losing value immediately after purchase similar to new cars. To achieve real-term gains, sellers must account for transaction costs like stamp duty and commissions, typically requiring a five-to-seven-year hold. The report indicates that while longer ownership generally increases profit potential, with median returns rising significantly after four years, it is not a guaranteed strategy against local market fluctuations and supply pressures.
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Long-Term Home Ownership Does Not Guarantee Profit When Selling
New data from Cotality’s Pain and Gain Report challenges the conventional wisdom that holding property for extended periods ensures financial gain. While 95.9% of Australian dwellings sold in the December quarter yielded a nominal profit, the hold periods for loss-making sellers (8.2 years) were nearly identical to those selling at a profit (9.2 years). Houses outperformed units, with 98.1% of house resales recording profits compared to 91.2% of units. Experts highlight that market dynamics, such as oversupply in high-density areas like Parramatta, can depress values regardless of holding duration. Buyers’ agent Michelle May notes that generic units and off-the-plan properties are particularly risky, often losing value immediately after purchase similar to new cars. To achieve real-term gains, sellers must account for transaction costs like stamp duty and commissions, typically requiring a five-to-seven-year hold. The report indicates that while longer ownership generally increases profit potential, with median returns rising significantly after four years, it is not a guaranteed strategy against local market fluctuations and supply pressures.
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