Perth property sellers are reaping the benefits of the improvements in the market, with the number of profit-making sales increasing to 73.8 per cent in the March quarter 2021, up from 66.8 per cent in the previous quarter and 56.9 per cent for the same time last year.
Corelogic’s Eliza Owen said while the rate of loss-making sales across Perth was still elevated, and the second highest rate of the capital city markets besides Darwin, a rapid recovery trend had supported an uplift in the incidence of profit-making sales.
“Between the market trough in July 2020 and March 2021, Perth dwelling values have risen 8.2 per cent,” she said.
“However, it is also worth noting that new listings volumes, particularly in the unit segment, have risen strongly across the capital in recent months.
“This suggests there may be a slight slowdown in the pace of the recovery trend, as sellers have been very responsive to recent value increases.”
The top five performers for the quarter were the Cottesloe local government area, where 88.3 per cent of resales made a profit, followed by the Shire of Mundaring (87.4 per cent) City of Joondalup (87.2 per cent), City of East Fremantle (86.4 per cent) and the Shire of Kalamunda and City of Melville (both at 85.2 per cent).
Not far behind was Nedlands at 84.9 percent and which recorded the largest median profit of $445,000.
Peppermint Grove did see a 100 per cent profit on resales, but this was off a very low number of transactions.
Some of the biggest losers in the March quarter 2020 saw dramatic turnarounds in performance, particular in the City of Bayswater where the portion of loss-making sales fell nearly 25 percentage points from the 48.5 per cent reported last year to 23.6 per cent.
Highlighting the changes in the Peel region, Mandurah (down from 42.3 per cent to 31.1 per cent) and Murray (down from 45.5 per cent to 24.7 per cent) markets also recorded large drops.
Closer to the CBD, Subiaco owners saw loss-making sales fall 17.6 percentage points from 41.3 last year to 23.7, while the portion of losses in the City of Stirling dropped from 42.3 per cent to 27.8 per cent.
The news was not as good for sellers in the City of Perth were loss-making sales remained around 62 per cent.
Behind Brisbane, Perth had the second largest gap between the rate of profit-making sales across houses and units, at 24.7 percent — 79.2 per cent of house resales made a nominal gain compared with 54.5 per cent of units.
Ms Owen said both segments had seen a vast uplift in the rate of profit making sales on the previous quarter.
Owner occupiers were also the bigger winners, with 83.6 per cent seeing a profit on resale, compared to 69.0 per cent of investors.
Ms Owen suggested this was common, and may in part be due to the longer typical hold periods for owner-occupied property, where longer hold periods typically yield higher nominal gains.