Australian homeowners pocketed a record-breaking median profit of $285,000 when reselling their properties in the June quarter of 2024, according to CoreLogic’s latest Pain & Gain report.
This figure marks the highest median gain since the series began in the early 1990s. The report, which analysed approximately 91,000 property resales, revealed that 94.5% of transactions recorded a profit, one of the highest rates since June 2010.
In total, nominal gains from resales reached $31.8 billion, a 7.7% increase from the previous quarter.
Eliza Owen, CoreLogic’s Head of Research, attributes the record gains to national housing values hitting fresh highs every month since November 2023.
“It also reflects sellers largely being empowered to time their resale for profit, given relatively stable conditions for mortgage serviceability,” Ms Owen explained.
However, the real estate market continues to show variability across Australia. Brisbane emerged as the most profitable city, with 99.1% of homes resold for a profit, followed by Adelaide at 98.7% and Perth at 95.4%.
On the other hand, Darwin and Hobart experienced the largest quarterly increases in loss-making sales, while Melbourne and Sydney ranked as 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,” Ms Owen said.
She expects the rate of profit-making sales to continue rising in the September quarter, in line with increasing home values.
However, she warned of potential headwinds, citing high interest rates, rising living costs, and affordability challenges as factors that could test the strength of buyer demand in the coming months.
On the flip side, the median loss from resale across Australia was -$40,000, with a total of $282 million in losses, up 2.5% from the previous quarter’s $275 million.
The largest combined loss from resales was recorded in November 2020, totalling $531 million. Units accounted for the majority (66.3%) of loss-making sales, with Sydney and Melbourne making up 70.6% of those sales.
Loss-making unit resales in these two cities represented nearly half (46.8%) of all loss-making sales in the quarter.
Ms Owen said that despite the losses, a -6.8% resale loss is relatively small and implies low risk of default, even for loss-making resales with short hold periods and little time to pay down mortgage debt.
Houses continued to outperform units, with 97.2% of houses sold for a profit nationally, compared to 89.4% of units.
“Not only were units around four times more likely to make a loss from resale than houses, but the median nominal gain from house resales was almost twice as large, at $340,000 compared to $185,000 for units,” said Ms Owen.
Despite this, both houses and units recorded record-high median nominal gains in the June quarter.
