Login
iscover
The amount that Aussies are making off the back of residential real estate transactions has hit a high not seen in decades.
According to CoreLogic, Australian property delivered a median nominal gain of $285,000 from resales in the June quarter of 2024 – the highest median gain seen since the booming market of the early 1990s.
Of the roughly 91,000 resales over the period, 94.5 per cent of transactions recorded a nominal gain, which the data firm reported as one of the highest rates since June 2010. Overall, nominal gains from resales totalled $31.8 billion in the June quarter – a 7.7 per cent lift from the March quarter.
On the other end of the spectrum, the median of losses from resale across Australia was -$40,000, with a median proportional loss of -6.8 per cent, totalling $282 million – an increase of 2.5 per cent from $275 million from the March quarter.
CoreLogic’s head of research, Eliza Owen, said the record profits could largely be attributed to consistently rising values, creating a solid foundation for sellers to strategically time their resale.
But she noted that while median profits are expected to continue on an upward trajectory in the September quarter, the trend might not be long-lived.
“The housing market faces some headwinds to demand in the form of high interest rates that are ‘higher-for-longer’, high cost of living and constrained affordability. Combined with what is looking like a robust spring selling season, the depth of buyer demand to deliver higher and higher profits may be tested in the coming months,” Owen said.
Looking at the capitals, Brisbane claimed the crown as Australia’s most profitable market, with a profit-making sales rate of 99.1 per cent. Adelaide followed at 98.7 per cent, then Perth at 95.4 per cent.
Darwin and Hobart saw the biggest quarterly increase in the rate of loss-making sales across the capitals, while Melbourne and Sydney became the second and third least-profitable cities after Darwin.
“The profitability across Brisbane, Adelaide and Perth reflects strong capital growth trends in recent years, which is also contributing to lower hold periods for profit-making sales,” Owen noted.
Houses versus units
CoreLogic also revealed that the majority of loss-making resales across Australia in the June quarter could be attributed to unit transactions, with 66.3 per cent of those loss-making sales coming from the apartment sector. Furthermore, 70.6 per cent of the units that recorded losses were to be found in Sydney and Melbourne.
Although that may not come as good news for apartment owners in Australia’s two largest capitals, Owen noted that the losses are sitting within a fairly safe zone for sellers.
“Even for loss-making resales with short hold periods and little time to pay down mortgage debt, a -6.8 per cent resale loss is relatively small and implies low risk of default,” she said.
Houses recorded a profit-making sales rate of 97.2 per cent nationally over the quarter, compared to 89.4 per cent in the unit segment. The median nominal gain from house resales was also almost twice as large as that of units, coming in at $340,000 for the former and $185,000 for the latter.
The rate of loss-making sales in the house segment came in at just 2.8 per cent nationally, compared to 10.6 per cent across the unit sector.
Even so, Owen sought to assure unit owners that in the long term, their property investment outlook remains promising.
She predicted that unit profitability would improve in the coming months, “as buyer demand pivots from the relatively expensive detached house sector”.
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
You are not authorised to post comments.
Comments will undergo moderation before they get published.