There is a misconception abounding that all property owners are making a gain when selling in the current market. This is absolutely incorrect, many residential apartments have still not reached their pre-Global Financial Crisis (GFC) values.

Here is just one snapshot of an apartment in a building with a great amentities, next to the train line and across the road from a park that recently sold:

Apartment 51/4 (2 Beds, 2 Bath, 1 Parking) was sold for $512,000 in Feb 2024 and was originally purchased for $555,000 in Oct 2013. Over the holding time of 10 years, the annual growth for this property was -0.78%.

So after holding the property for 10.5 years, they have lost $43,000 ($512,000 - $555,000) prima facie on the property's value. Of course, they may have done really well with rental income and this is just a simplistic view based on purchase and sale price.

Check the info - click here for the full details

There is a similar trend in commercial real estate, with some areas and types of properties being harder hit than others - read our update on offices for rent in West Perth.

For this reason, we consider direct property investment a lumpy asset, you cannot sell a bathroom if you need some money and you need to be prepared to invest for the long term, i.e. 15 - 20 years, to improve your chances of making a gain.

Disclaimer: Whilst we are passionate about investing and well-versed with property issues, we are focused on financial and taxation aspects as we are not Real Estate Agents and this information is general in nature. So, before acting on this or any other information, it is important to seek professional advice related directly to you and your circumstances.  Should you require our assistance with a referral to a relevant professional, contact your Primarius Team leader, or if you want to know more about the tax implications of property purchases email us at info@primarius.net.au

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