Here's where property flippers make and lose the most money in Australia

‘The Block’ Auction Day. Photo: Patrick Riviere/ Getty Images.

New research from CoreLogic shows that if you’ve bought and sold Australian property within the last five years, then chances are you’ve made money.

However, the data reaffirms that Australian property is comprised of many markets, and not every one is guaranteed to outperform — particularly over a shorter time frame.

As evidence, more than eight in ten apartments bought and sold in Darwin within the last five years lost money.

The numbers are broken down in CoreLogic’s quarterly “Pain & Gain” report, which this time included analysis of the return on properties resold within five years for both houses and units.

As seen in the table below that CoreLogic’s Cameron Kusher posted on Twitter, results to the end of June showed that the success of short-term investors varied greatly by city and property type:

Source: Twitter

The data is based on a simple calculation of the nominal value of properties sold, less the purchase price. The figures don’t account for taxes and other property servicing costs.

As expected, detached houses in capital cities on Australia’s east coast were the most likely to have recorded a gain.

At least 95% of properties bought and sold within the last five years in Sydney, Melbourne, Brisbane, Hobart and the ACT made a profit.

However, that figure dipped sharply in Perth where you were only around half a chance to make money, while short-term property resales in Darwin were more likely to have recorded a loss.

The research follows a map of property prices that CoreLogic prepared last month, which showed how price appreciation over the last 12 months was concentrated in specific markets.

The numbers in the Pain & Gain report also show a wide divergence between the performance of home and unit sales, as well as across different regional areas.

And the figures jump around – for example, regional sales of both homes and units in WA outperformed the state capital of Perth, while there was a sharp fall in the performance of both property classes in regional SA compared to resales in Adelaide.

CoreLogic’s Kusher also added that the numbers reaffirm property is a long-term investment class.

The figures indicate that the risk of losses increases when investors operate on a shorter time-frame.

Data for the March quarter showed that only 20.7% of all Perth houses re-sold at a loss, including properties that were held for longer than five years. That compares to 48.8% losses in sub-five year resales in the latest figures.

The poor performance of Brisbane units — one third of resales in the last five years sold at a loss — is perhaps reflective of the city’s ongoing problems with apartment oversupply, following reports that a number of Queensland construction companies have collapsed this year.

In addition to the above table, CoreLogic’s weekly house price and auction clearance rate data are consistently showing that Australian house prices are cooling, as macro-prudential restrictions and out-of-cycle rate hikes take effect.

So, while nationally in the five years to June there was still around a 90% success rate when buying and selling property across a five-year time frame, it will be interesting to monitor the profitability of short-term resales in the near future.

You can follow Cameron on Twitter here.

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