Profits uncertain for most property investors

Font size :
According to CoreLogic RP Data's latest Pain and Gain report, recent housing sales reveal that many property investors sold at a loss. Even though majority ended up making a profit, the returns were not that great, even for one-third of those who doubled their money.

Average annual returns showed a miserable four per cent—just a little above inflation—as it took investors an average time of 17.2 years in capital cities and 18.1 years in regional cities to double their money. This is a far cry from the shares market that averages around 9 to 10 per cent per year over long periods of time.

Moreover, nine per cent of property investors even sold their houses or apartments at a loss, despite holding them for around 5.4 years. Just this March quarter, roughly 19.2 per cent of apartments were resold for less than their original purchase price. That means that one out of five apartments cost their owners money rather than deliver capital gains. Losses increased for regional areas of Western Australia, South Australia, Queensland, and the Northern Territory in particular due to the end of the resources boom.

"Property ownership, whether for investment or owner-occupier purposes, should be seen as a long-term investment," said CoreLogic research analyst Cameron Kusher.

Statistics show that property investors should buy houses in one of Australia's East Coast capital cities—namely Sydney, Melbourne, and Canberra—if they want to avoid a loss.

The housing markets suffered a sharp correction in recent months due to the Big Four's limit on investor lending, as well as investors with foreign income.

With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now

Mortgage News and Articles

How to tell when a housing market is cooling How to tell when a housing market is cooling

You need to check clearance rates, listings, and the price gap, among other factors Read more

Growing demand for green apartments in Sydney Growing demand for green apartments in Sydney Both owner-occupiers and investors favour eco-friendly buildings for their energy-saving features and reduced environmental footprint ... Read more

Are property investors as rich as they appear? Are property investors as rich as they appear? A multi-property portfolio doesn’t guarantee easy millions ... Read more

Be proactive about getting a better mortgage deal Be proactive about getting a better mortgage deal Apathy could be costing you a considerable amount of money over the lifespan of your loan ... Read more

More mortgage news and articles

Sponsored Links

Monday, Sep 25, 2017
Top Featured Rates
Top Bank Rates

Get help choosing the right home loan

Let us help you find the right home loan for your needs.

Tell us a bit about your circumstances:
  • Purpose of mortgage
  • Household Income
    $
  • How much do you want to borrow?
    $
  • How much deposit do you have?
    $
  • How much is your house worth?
    $
  • How much do you still owe on your mortgage?
    $
  • What type of mortgage do you have?


  • How much is your new home?
    $
  • How much do you want to borrow?
    $
  • How soon do you want a mortgage?
Next
  • First name
  • Last name
  • Where do you live?
  • Phone number

Special Offers

Related Keywords