Slumping inner city resale values a stress for lenders
One resale in five for residential units was made at a loss in regional centres over the March 2016 quarter, providing a guide to the probable scope of negative equity as a problem for Australian lenders.The CoreLogic-RP Data "Pain & Gain" report for the quarter also shows almost ten per cent of apartment sales in capital cities were transacted at a loss.CoreLogic put the average loss recorded on houses in capital cities at A$81,694 and at $45,618 for units.In regional centres the average loss on a resale was $106,172 while for units it was $67,778. "The proportion of loss-making resales has increased across each capital city over the most recent three months," CoreLogic said, but added that, while the proportion of loss-making resales had risen, "on an historic basis most cities are still seeing quite a low instance of homes reselling at a loss."Losses on unit sales in larger cities were most prevalent in inner Perth, affecting 24 per cent of all resales. In inner Melbourne the proportion was 19 per cent.In Canberra the level was 22 per cent and in Darwin 26 per cent.CoreLogic observed that "all regions analysed except for inner Sydney and south and central Adelaide and the Adelaide Hills are recording more than one in ten unit resales at a loss. "This is obviously a potential cause for concern with most of these regions expecting to see significant additional supply entering the market over the coming years."