Short-term home buyers lose money

Short-term home buyers lose money

01 March 2010 by Staff Reporter 0 comments

Almost a quarter of Australians who bought and sold property within the last five years lost money, a new study has found.

According to property analyst Residex, 24 per cent of properties bought and sold between January 2005 and January 2010 fetched less than the original purchase price.

The company’s chief executive officer John Edwards told The Daily Telegraph, that the average shortfall was $54,000.

The biggest losses were in the affluent Neutral Bay/Spit area, where typical shortfalls topped $275,000.

Mr Edwards attributed the loss to over the top valuations and ill-informed property buyers.

"Valuing property is still more of an art than a science" said Mr Edwards.

"Valuers do not have to provide enough statistical evidence for their valuations and, frankly, they are not paid enough to spend sufficient time on each property."

Legally, valuers are allowed a margin of error of between 10 and 15 per cent, equivalent to as much as $90,000 on a median Sydney property.

Almost a quarter of Australians who bought and sold property within the last five years lost money, a new study has found.

According to property analyst Residex, 24 per cent of properties bought and sold between January 2005 and January 2010 fetched less than the original purchase price.

The company’s chief executive officer John Edwards told The Daily Telegraph, that the average shortfall was $54,000.

The biggest losses were in the affluent Neutral Bay/Spit area, where typical shortfalls topped $275,000.

Mr Edwards attributed the loss to over the top valuations and ill-informed property buyers.

"Valuing property is still more of an art than a science" said Mr Edwards.

"Valuers do not have to provide enough statistical evidence for their valuations and, frankly, they are not paid enough to spend sufficient time on each property."

Legally, valuers are allowed a margin of error of between 10 and 15 per cent, equivalent to as much as $90,000 on a median Sydney property.

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