{"id":9549,"date":"2016-10-07T15:00:18","date_gmt":"2016-10-07T04:00:18","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=9549"},"modified":"2016-10-07T15:00:18","modified_gmt":"2016-10-07T04:00:18","slug":"more-gain-than-pain-in-real-estate","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/more-gain-than-pain-in-real-estate\/","title":{"rendered":"More gain than pain in real estate &#8211; John McGrath"},"content":{"rendered":"<p>&nbsp;<br \/>\n<strong>In his column in\u00a0<a href=\"http:\/\/switzer.com.au\/the-experts\/john-mcgrath-property-expert\/more-gain-than-pain-in-real-estate\/\" target=\"_blank\" rel=\"noopener noreferrer\">Switzer<\/a>, John McGrath discusses CoreLogic&#8217;s Pain and Gain report.\u00a0<\/strong><\/p>\n<h4>Here&#8217;s what he had to say:<\/h4>\n<p>New research from CoreLogic shows property continues to provide excellent wealth creation for owner-occupiers and investors alike \u2013 as long as you make smart decisions both at the time of purchase and also when selling.<a href=\"https:\/\/i0.wp.com\/realestatetalk.com.au\/wp-content\/uploads\/2014\/08\/mcgrath.jpg\"><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\"alignright size-full wp-image-1807\" alt=\"mcgrath\" src=\"https:\/\/i0.wp.com\/realestatetalk.com.au\/wp-content\/uploads\/2014\/08\/mcgrath.jpg?resize=150%2C143\" width=\"150\" height=\"143\" \/><\/a><br \/>\nThe\u00a0<em>Pain and Gain Report<\/em>, released late last month, shows the average capital gain earned by capital city vendors who sold their house for a profit during the June quarter was<strong>\u00a0$363,442<\/strong>.<br \/>\nFor capital city apartment sellers, the average gain was\u00a0<strong>$229,596<\/strong>.<br \/>\nIn regional markets, the average capital gain on houses sold for a profit was $154,773 and $107,680 on apartments.<br \/>\n<strong>Now that\u2019s the \u2018gain\u2019 side of the equation.<\/strong><br \/>\nThe report also gives us the \u2018pain\u2019 side, that being the re-sale losses where homes were sold for less than their purchase price.<br \/>\nOverall, 5.9% of houses and 9.5% of apartments sold in capital city markets in June were sold at a loss.<br \/>\nThe average loss on houses was $94,936 and it was $67,456 for apartments.<br \/>\n<img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\"alignright size-medium wp-image-8431\" alt=\"dollars_5_18_04\" src=\"https:\/\/i0.wp.com\/realestatetalk.com.au.s3.amazonaws.com\/wp-content\/uploads\/2016\/06\/dollars_5_18_04-300x220.jpg?resize=300%2C220\" width=\"300\" height=\"220\" \/><br \/>\nThe capital cities where the most re-sale losses occurred were Perth and Darwin.<br \/>\n<strong>In regional markets, 12.2% of houses and 19.9% of apartments sold below their purchase price.\u00a0<\/strong><br \/>\nThe average loss on houses was $64,423 and it was $61,944 for apartments.<br \/>\nThe area that experienced the most re-sale losses was, by far, regional Western Australia.<br \/>\nAs you can see, there\u2019s generally more gain than pain in property, but statistics like this do remind us that it\u2019s possible to lose money if you make the wrong choices.<br \/>\nThankfully, they\u2019re pretty easy to avoid.<br \/>\n<strong>The biggest contributing factors to re-sale losses in real estate are as follows:\u00a0<\/strong><\/p>\n<h4>1. Selling too soon after purchasing<\/h4>\n<p>For the ordinary buyer, real estate should always be a long-term play.\u00a0<img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\"alignright\" alt=\"house sale seller owner sold property\" src=\"https:\/\/i0.wp.com\/puassets.s3.amazonaws.com\/wp-content\/uploads\/2015\/09\/house-sale-seller-owner-sold-property-300x225.jpg?resize=300%2C225\" width=\"300\" height=\"225\" \/><br \/>\nBuy it, sit on it, maybe make some improvements along the way and don\u2019t sell for at least 7-10 years.<br \/>\nI say this because on average over the past century, Australian property values have pretty much doubled during this sort of timeframe.<br \/>\nGiven the costs of buying in, you don\u2019t want to get out until you\u2019ve made some really good money, so a good rule of thumb is a minimum 7-10 years because this is usually enough time for a full-growth cycle to occur.<br \/>\nIf you get really lucky and buy just before a boom, you might be able to sell in a shorter timeframe and still make great money, but even so, I still recommend holding for as long as you can to truly maximise your overall gain.<\/p>\n<h4>2. Buying in second-tier locations<\/h4>\n<p>This can be avoided through rigorous research.<br \/>\nDon\u2019t buy in towns with declining populations or areas that rely on just one or two major industries, particularly volatile industries such as mining and tourism.<br \/>\nWhen it comes to choosing areas within a suburb, or particular streets, talk to agents and become an expert on your target neighbourhood to ensure you make the right purchasing decision.<\/p>\n<h4>3. Stretching your budget too far<\/h4>\n<p>When buying, don\u2019t stretch your budget beyond what is reasonable for your circumstances.<br \/>\nLook ahead 7-10 years.\u00a0<img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\"alignright\" alt=\"bank-savings-house-couple-save-property-meeting-budget-300x199\" src=\"https:\/\/i0.wp.com\/puassets.s3-ap-southeast-2.amazonaws.com\/wp-content\/uploads\/2016\/04\/bank-savings-house-couple-save-property-meeting-budget-300x199-300x199.jpg?resize=300%2C199\" width=\"300\" height=\"199\" \/><br \/>\n<strong>Can you afford the loan repayments at 7-8% interest (the long-term average)?<\/strong><br \/>\nCan you keep up the repayments if you lose your job or take time off to have a baby, for example?<br \/>\nDo you have enough savings for other unexpected costs?<br \/>\n<strong>You need a \u2018yes\u2019 answer to all these questions before you buy.<\/strong><br \/>\nIf not, the likelihood is you\u2019ll end up selling simply to liquidate funds and that will usually involve a loss.<br \/>\nReal estate is an expensive asset class, but it\u2019s also one of the safest and most reliable vehicles to wealth creation in Australia.<br \/>\nIf you keep it simple \u2013 buy good quality property in good quality locations and hold for the long term, you have every reason to expect a very positive outcome.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>&nbsp; In his column in\u00a0Switzer, John McGrath discusses CoreLogic&#8217;s Pain and Gain report.\u00a0 Here&#8217;s what he had to say: New research from CoreLogic shows property continues to provide excellent wealth creation for owner-occupiers and investors alike \u2013 as long as you make smart decisions both&#8230;<\/p>\n","protected":false},"author":176692471,"featured_media":5685,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[13,17,27],"tags":[],"class_list":["post-9549","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-latest-story","category-property-investment","category-trends-topic"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>More gain than pain in real estate - John McGrath - Realty Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/channels.realty.com.au\/realtytalk\/more-gain-than-pain-in-real-estate\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"More gain than pain in real estate - John McGrath - Realty Talk\" \/>\n<meta property=\"og:description\" content=\"&nbsp; In his column in\u00a0Switzer, John McGrath discusses CoreLogic&#8217;s Pain and Gain report.\u00a0 Here&#8217;s what he had to say: New research from CoreLogic shows property continues to provide excellent wealth creation for owner-occupiers and investors alike \u2013 as long as you make smart decisions both...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/channels.realty.com.au\/realtytalk\/more-gain-than-pain-in-real-estate\/\" \/>\n<meta property=\"og:site_name\" content=\"Realty Talk\" \/>\n<meta property=\"article:published_time\" content=\"2016-10-07T04:00:18+00:00\" \/>\n<meta name=\"author\" content=\"rolanrush\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rolanrush\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/more-gain-than-pain-in-real-estate\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/more-gain-than-pain-in-real-estate\\\/\"},\"author\":{\"name\":\"rolanrush\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/#\\\/schema\\\/person\\\/384a57ac9e52cb9bf19896cb15eaa52d\"},\"headline\":\"More gain than pain in real estate &#8211; 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