An increase in the short-term sale of properties — those that are bought and sold within three years — has hit a 10-year high, with the biggest spike in regional Queensland, according to a national outlook of housing trends.
Data from property analyst group CoreLogic has revealed a sharp increase in the repeated sales of properties in regional Australia, hitting a 10-year high of 18.9 per cent.
Previously, short-term sales were commonly due to properties being “flipped”, but the data suggests mortgage stress has now created “proactive selling” conditions.
Regional Queensland recorded the highest portion of properties that were subject to short-term resales from 2022-23, with the Wide Bay region sitting on top at 27.4 per cent.
Head of Australian research at CoreLogic, Eliza Owen, said there were a couple of reasons the trend had become more “prominent” in 2023.
“They include things like strong capital growth and higher mortgage payments — but for regional Australia, there’s the added factor of a potential reversal in sea change and tree change trends,” she said.
“The market has seen a 50 per cent increase in value since the start of the pandemic.
“But mortgage stress could also be a factor here.”
Ms Owen pointed to the “low-interest rates” people had taken on for a fixed term of three years, noting that the short-term sales trend is “particularly relevant in a rising interest rate environment”.
Costs outweighing benefits for some
Ipswich real estate agent Mitch Edwards has been a local all his life and started working in the industry in 2006.
He’s seen this trend play out in real-time, with a client recently making the move to sell an investment property they only secured “a couple of years ago”.
“With the rate rises on that property, as well as his own personal property, his broker [suggested] to sell,” Mr Edwards said.
“He was very frustrated … he didn’t really want to sell it [but] it [was] costing him more than it was benefiting him.”
The real estate agent has also seen some first home buyers, including friends, who have had to refinance their home loans in an attempt to stay afloat after their rates “almost doubled”.
“I have seen a lot of people that are getting appraisals because with the rate rises that have happened, they may need to sell in the new year,” Mr Edwards said.
Changing migration patterns
Ms Owen said regional Queensland had “seen some of the highest concentrations of short-term selling”, making up more than a fifth of overall sales in the year to August.
While the average number of homes “held for a short period of time” was historically around 14.5 per cent for the state, it has risen to roughly 21 per cent.
But the Sunshine State isn’t the only one seeing the trend, with Ms Owen noting that “most of regional Australia” is seeing similar results.
“It could be that people are proactively selling to get ahead of a mortgage that they can’t afford, but the good news for such sellers is that property values have increased rapidly,” she said.
“So at least they can pay off their debts and maybe have a bit leftover.”
Ms Owen has also observed “more normalised levels of migration from capital cities to regions”, which could help explain the trend.
She said that while Brisbane had seen “a bit of an uptick in short-term resales” as well, the trend was “very much” confined to regional Australia.
“[It] could reflect some of the changing in migration patterns that we’ve seen post COVID lockdowns as well,” Ms Owen said.
‘Distressing’ rate rises
Mr Edwards said there was a risk that the seller’s market could flip to a buyer’s market “if there’s a large number of people in the same boat” who are also looking to sell.
“We did see it [happen] before in 2008, where say a home sold for $320,000, we were reappraising it at $299,000,” Mr Edwards said.
“That’s a $20,000 loss — not a lot of people have [that much money] sitting in their back pocket.
“It is distressing [hearing] ‘Hey Mitch, we can’t afford to live here anymore, we need to sell’.”