Mum and dad investors face a mixed bag of fortunes in property, with small industrial lots and houses netting good profits but too many unit owners selling at a loss.
A new report by Knight Frank shows small lots of industrial land in Perth have continued to increase in value this year, defying east coast trends, where the asset class has stabilised or even dropped in value.
The value of smaller lots in Perth’s industrial market — for sub-5000sqm lots and medium-sized blocks of one to five hectares — grew in the first three months of the year.
Prices jumped 3 per cent to 5 per cent in most precincts to be up by 11 per cent year-on-year. Average prime rents rose by 1.8 per cent in the three-month period.
Small industrial lots in the outer South have seen particularly strong growth, with prices for small and medium lots up by 27 per cent and 25 per cent respectively over the past year.
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Knight Frank Head of Industrial Logistics Geoff Thomson said prices had been driven by owner-occupiers.
A separate report by CoreLogic shows residential resales are also winning investors some big returns, with 93.6 per cent of all sales in the first three months of the year selling for more than the owners paid for the property.
It is highest proportion of homeowners walking away with a profit since May 2015.
The Pain and Gain report shows only 6.4 per cent of homeowners sold for less than their original purchase price during the first quarter, down from 8.1 per cent in the previous quarter.
The overall proportion of losses is well down from the high of 43.8 per cent in the June quarter of 2020.
But there remains a sizeable gap in the profitability of house and unit sales, with 97.8 per cent of detached houses selling at a profit in the March quarter but only 84.4 per cent of unit resales making a nominal gain.
Of the 450 units that sold at a loss in Perth, nearly half — 46 per cent — were in the inner city local government regions of Perth, Vincent and Subiaco.
But the report expects unit holders in the three areas, like those across Perth, will see better profitability in the June quarter.
“With home values having risen 6.1 per cent in the three months to May, and median selling times across the city at just 10 days, conditions are excellent for sellers,” the report stated.