The share of lucrative resales continued to rise from the COVID-induced low in June of last year, marking a substantial increase in the first three months of 2021, according to the latest report by CoreLogic.
In the first quarter of the year, the share of lucrative resales amounted to 90.3% compared to 89.1% in the previous quarter. This is a substantial improvement from the low of 86 percent recorded in June of last year.
Eliza Owen, head of research at CoreLogic, claims that the increase in the for-profit resale rate is due to the skyrocketing growth in Australian home values.
“Between the market bottom in September 2020 and the end of March 2021, Australian home values ??rose 8.2%. Total profit for sellers in the first quarter of 2021 was $ 30.6 billion nationwide. This is actually down from the $ 32.2 billion in the December quarter, but it's likely a reflection of a seasonal drop in sales at the start of the year " , she said.
The first three months of the year also marked the fourth consecutive quarter in which regional Australian resales posted a higher rate of return than in capital markets.
However, the observed profit rate gap between capital cities and regions has narrowed.
Nonetheless, Owen stated that a widespread recovery in the housing market continues to foster higher profitability from resales in the housing market.
“However, with the housing market at extraordinary record values, there are potential headwinds that buyers should beware of. Nationally, these include affordability constraints, possible mortgage rate hikes, and the lingering threat of COVID clusters, "she said.
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