The benefits of owning real estate in Adelaide are always growing but it could pay to hold onto that investment property a little longer, with the latest CoreLogic RP Data Pain and Gain report for the September 2014 quarter indicating that the longer you own a property, the more likely you are to make a profit from its re-sale.
Across home re-sales throughout the September 2014 quarter, figures reveal that those homes only held for a short period of time – generally between one to five years – were much more likely to record a gross loss of profit come sale time. Interestingly, across the country there is quite a bit of variation in the proportion of total home re-sales that were at a loss and the length of time they had been owned. In Melbourne, Adelaide, Hobart, Darwin and Canberra homes that were bought between 2009 and 2011 were the most likely to record a gross loss. But in Sydney and Perth, homes purchased and sold over the past year were most likely to record a gross loss.
However, Adelaide houses recorded the greatest proportion of loss-making sales between three to five years of ownership with 29.6 per cent of properties reselling for less than their original purchase price, followed by those homes owned for between five to seven years. By comparison, homes owned for ten to 15 years, and 15 years or more, recorded the smallest proportion of losses in resale.
This further emphasises the long-term nature of property investment. For example, suburbs within the Adelaide council zone recorded loss-making sales at 14.8 per cent, but this correlates with the report's findings on length of ownership. The average hold time for properties that recorded a loss in this area was only 5.9 years, whereas those properties that made a profit had an average of 8.9 years.
In any case, the outlook is positive for Adelaide investors. Over the September 2014 quarter, Adelaide re-sales recorded the lowest proportion of gross losses since the 12 months to November 2011 at 9.5 per cent. What's more, the proportion of loss-making re-sales is down considerably from 13.8 per cent a year ago.
With this in mind, seek advice from your agent if you're unsure or want to know more about the the opportunities to invest in Adelaide's property market during 2015.