Homes in WA and TAS double in value

The December Pain & Gain Report revealed that 31.8 per cent of homes sold for more than double their purchase price nationally, compared to 13.0 per cent of homes which sold for a loss.

Report author and RP Data research analyst Cameron Kusher said Western Australia and Tasmania both recorded the greatest proportion of home sales at more than double the original purchase price.

“This is despite the fact that both markets have underperformed over the past five years and highlights once again [that] if owners can ride out the short-term market volatility they have historically made quite significant capital gains from the housing market.  This is highlighted by the fact that homes that sold for more than double their original purchase price had been held for an average of 15.3 years.”

The report revealed that houses were more likely to sell for more than double their original purchase price, with 36.1 per cent having a gross profit of more than 100 per cent in the December quarter, compared to 21.3 per cent of unit sales.

The average realised gross profit across the sales was $375,031 for houses and $278,247 for units.

“Houses which sold for more than double their previous purchase price had been owned for an average of 15.2 years compared to 15.8 years for units,” the report read.

“The result highlights the long-term nature of housing investment and the fact that profit typically increases the longer a property is held.”