Despite a recovery in property prices, some investors are quitting the market and cutting their losses due to rising mortgage repayments.
More than two in five property sales in the City of Melbourne were struck at a loss in the June quarter, despite a broader recovery in property prices.
“They’re cutting their losses. Even though the rental market is very tight, it’s not touching the sides of the extra costs of interest rates.” “At a high level, we’ve passed the peak of pain. This report is showing pain for recent home buyers, but on aggregate level, Australians are back on the way to making profits,” Owen said.The overall profitability picture is improving as the property market recovers. Only 9 per cent of Melbourne property sales traded at a loss in the June quarter, down from 10 per cent in the March quarter.But there was pain among owners who resold within two years. Some 9.
“It has been a tough market in Melbourne because it was hit harder through the lockdowns, and then it saw a muted recovery,” he said. “Melbourne’s unit market was probably the hardest hit during COVID, with a lack of migrants and a hit to the rental market as well.”Melbourne home owners have been holding onto their properties for longer, a separate report found.
The longest term for unit owners was 12 years in Moreland - North, followed by 11 years in Casey - North and Casey - South.
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