City lost $800m on houses in three years

Monday 12 Sep 2011

SYDNEY property owners lost $800 million by selling their homes over the past three years in an "ice-cool"market.

Of the 250,000 properties sold, 15,500 went for less than the owners paid. On average, they lost $52,000.

In Blacktown, 312 of 3050 properties sold at a loss.

Values in the inner west and pockets closer to the city remained strong. The worst loss-making suburbs were in the outer west - but apartments in the Sydney CBD also took a hammering.

However, Residex figures showed a flat market and were not "disastrous", Robert Mellor, head of building and construction for economic forecaster BIS Shrapnel, said.

"Certainly in the last couple of years, if anything, those markets have held their own better than some of the higher areas," Mr Mellor said.

Even so, western suburbs agent Zeth Grant said clients wanted to sell homes, even recently, as they were "just flogging a dead horse."

"We sold a townhouse last week at Mt Druitt ... they paid $290,000 in 2002 ... and we sold it for $265,000," he said.

"When people bought medium density in 2001 the prices were stupidly high and they haven't caught up."

Outside the city and west, 143 of 2063 Cronulla homes sold for a loss. In Rockdale, 131 of 1156 made losses. Homes in the worst-hit suburbs lost, on average, less than $100,000. But the biggest falls were felt in the elite areas of the east and northern suburbs.

When broken down by street, those in which houses lost between $100,000 and $200,000 were topped by Darling St, in Bronte, The Crescent in the exclusive enclave near Hunters Hill of Linley Pointand the Pacific Highway at North Sydney.

Homes sold in Billyard Ave, Elizabeth Bay, lost $200,000 to $400,000 since 2007.

Tamarama suffered plunging median values, including the popular Birrell St.

Many economists believe the market has hit bottom and will start picking up.

The spring market should be buoyed by first home buyers spurred by cuts to stamp duty concessions on January 1, announced in the state budget.

Residex's John Edwards said: "The losses show there's a tendency for people to not buy rationally. We're just at the very start of property prices turning around and it's important buyers do their research."

The Daily Telegraph

- Bronwen Gora Real Estate Writer - The Daily Telegraph