For years Real Estate agents have been saying you can’t lose with property. Despite this reassurance, Residex research shows 24% of Sydneysiders who have brought and sold property in the past five years have lost. The average shortfall has been more than $54,000 or in many cases, the value of two years rent.
Residex CEO John Edwards says as many as a third of homeowners who bought their properties in the past five years would realise a loss if they sold today, yet few were aware of their mistake.
The problem comes from over valuation of property. In a slow market, the problem is likely to get worse, and as Australia’s property bubble nears the top the risks of paying too much will greatly increase. Buyers may also overbid with farce competition with cashed up Chinese buyers now that FIRB legislation has been relaxed.
In Melbourne over the same period, 15% of properties were sold at a loss. In Brisbane this decreased to 5.6% and Adelaide recorded 5%.
» Our real estate losers – a quarter of Sydney homeowners have lost money The Sunday Telegraph, 28th February 2010.
» Buy, sell and lose – the property trap – Adelaide Now, 28th February 2010.