/One in 10 home sellers lost money in Sydney’s emerging high-rise apartment hubs

One in 10 home sellers lost money in Sydney’s emerging high-rise apartment hubs

Sold for $45k loss: this home on Church St in Parramatta sold in 2018 for $940,000. It had previously sold in 2014 for $285,000.

Almost one in 10 home sellers made a loss on their properties over the September quarter in apartment construction hubs Ryde, Canterbury and the Bankstown area.

The average loss was $55,000-$77,000, according to the new data in a CoreLogic Pain and Gain report.

About 6-8 per cent of sellers also made losses in the Rockdale, Liverpool, Parramatta and Auburn council areas.

Apartment sales accounted for more than half the properties sold in these areas and the majority of sellers who lost money offloaded homes they had purchased in the last three years.

Sold for $90k loss: this unit on MacArthur St in Parramatta recently sold for $499,000. It had previously sold in 2017 for $589,000.

Housing experts said these sellers were making losses because they purchased their homes at inflated prices during the most recent market peak, only for the market to cool in the years after.

Their difficulties selling were exacerbated by the sudden release of a glut of new units at a time when many buyers were struggling to get loans from banks, forcing the sellers to cut their prices.

“Buyers have more choice and can negotiate harder,” CoreLogic head of research Tim Lawless said.

“Properties are taking longer to sell … sellers who are in a position where they need to sell quickly may need to lower their price (expectations).”

This unit in Ryde sold for a $115,000 loss.

Rampant building activity had a particularly strong impact on the Ryde council area, where the median home price dropped 11.3 per cent this year.

This was well above the 8.1 per cent drop in prices across Sydney as a whole.

Recent Ryde sales included a one-bedroom apartment at 4 Devlin St, which sold for $565,000 — $115,000 less than what the seller paid in 2014.

The sellers of a nearby unit at 21-31 Porter St made a $66,000 loss on their sale, while up the road a unit at 2D Porter St sold for $38,000 less than what the owner paid four years ago.

A unit in this building on Hall St in Auburn sold for $76,000 less than the owner paid in 2015.

More apartments are set to come with close to 4100 new units projected to be completed in the Ryde region over the next two years, increasing the supply of apartments by 15 per cent.

Sellers in the Greater Parramatta area were in a similar situation with median home price falls of 11.1 per cent over the past year and a pipeline of about 5700 new units set to be completed by 2020.

Recent sales included a unit at 42-44 MacArthur St in the Parramatta CBD, which changed hands for $90,000 below the 2017 purchase price of $589,000.

A nearby apartment at 330 Church St sold for $45,000 below the 2014 price, while another unit at 2-8 River Rd sold for $20,000 less than the 2017 price.

Sold at $45,000 loss: this Jacobs St unit in Bankstown recently resold for $470,000. It 2017 it sold for $515,000.

Sellers had little trouble making profits off their homes in the Sydney regions with a low supply of new apartments.

Less than 1 per cent of sellers made a loss in the Blue Mountains, Hunters Hill, Waverley, Mosman and Manly, with the typical profit more than $300,000.

PROPORTION OF HOMES SOLD FOR A LOSS

Ryde 10.3%

Canterbury 9.4%

Bankstown 9.3%

Auburn 8.7%

Rockdale 7.9%

Liverpool 7.3%

Leichhardt 7.1%

Parramatta 6.5%

Botany Bay 6.5%

Holroyd 6%