Property sale profits soar during September quarter

By the resi financial blog team, 22 January 2014

Property sale profits soar in September

Anyone looking into purchasing investment property in the near future could be interested to hear about the growth of profits earned from selling real estate across the nation.

The latest RP Data report has highlighted a direct relationship between the length of time a property is owned and the profit earned when selling in the future, which could be valuable information for anyone considering property investment.

For example, according to the report, properties that suffered from a loss of revenue were held for a shorter period of time - only 5.2 years on average, to be exact. However, properties that earned a profit when sold were held for an average of 9.7 years.

Finally, properties that earned a profit of 100 per cent or more over their original purchase price were held for 15.8 years. This information could be extremely useful for investors, who are often divided between the type of investment income they wish to earn - rental yields or capital gains.

Furthermore, during the September quarter in 2013, there were 69,949 properties sold across the nation. Over this period, 11.1 per cent of these sold for a loss. Overall, the average loss for each transaction was $62,726 - with a gross loss nationwide of $488.1 million.

On the other hand, 88.9 per cent of the homes sold during the September quarter struck a profit, with the average income per transaction reaching a huge $202,546. This resulted in a nationwide gross profit of $12.6 billion.

This could highlight a great opportunity to secure investment property in the near future, and provide the incentive to hold on to it for an extended period of time in order to maximise the returns you'll receive following its sale.

Categories: Home Loans, Property Investment