Wealth effects felt in housing

Twelve per cent of vendors selling residential property in the first quarter of 2012 did so at a loss, property research firm RP Data estimates. In most cases those selling at a loss had owned their home for less than four years.

A report on "property value accumulation" did not provide any comparison with earlier periods, but it did highlight the divergence in the spread of capital gains and losses between vendors that bought in 2008 - the year of the financial crisis - and later.

RP Data said that 27.5 per cent of vendors who had purchased since 2008 - and had sold their home during the first quarter of 2012 - had incurred a loss.

By contrast, of those vendors who sold during the quarter who had bought before 2008 only seven per cent experienced a loss.

The report also concludes that the incidence of negative equity may be on the wane.

The property research firm estimates that 5.4 per cent of homes are valued at less than or equal to the same amount as the price paid at the time of purchase, down from 6.0 per cent at the end of the December 2011 quarter.

This estimate of negative equity is derived wholly from changes in the level of property prices and does not allow for repayments by borrowers.