Investors are more likely to sell properties at a loss when compared to owner-occupiers, according to a new CoreLogic report.
The December 2017 quarter edition of the CoreLogic Pain & Gain report has revealed 11.3 per cent of investor-held properties were sold at a loss, as opposed to 7.5 per cent of owner-occupier-held properties.
The trend continued for capital cities, which saw 9.3 per cent of investor-held properties selling at a loss, as opposed to 6.7 per cent of owner-occupier-held properties, as well as regional areas, with 15.3 per cent of investor-held properties, as opposed to 9.8 per cent of owner occupier-held properties.
The only region where this trend was reversed was in Sydney, where only 1.7 per cent of investor-held properties were sold at a loss, as opposed to 2.2 per cent of owner-occupier-held properties.
Houses were also more profitable than units, with 7.7 per cent of houses being resold at a loss, while 11.8 per cent of units were resold at a loss.
Cameron Kusher, research analyst at CoreLogic, said the profitability of reselling properties has tracked alongside rising property values.
“With property values continuing to increase over the final quarter of 2017, albeit at a more moderate pace, the proportion of properties resold at a profit has continued to climb,” he said
According to Mr Kusher, investors would be more likely to sell at a loss as those losses can be offset with future capital gains, an option unavailable to owner-occupiers.
“If home values fall, investors (which have been increasingly active in the housing market) may be more inclined to sell at a loss and offset those losses which in turn could result in much more supply becoming available for purchase at a time in which demand for housing falls because values are declining,” he said.