Australian property owners recorded a new high in resale profits during the June quarter of 2024, with a median nominal gain of $285,000, according to CoreLogic’s latest Pain & Gain report.
The analysis, which covered around 91,000 property resales, found that 94.5% of transactions delivered a profit, one of the highest rates since June 2010.
The total nominal gains from these resales reached $31.8 billion, a 7.7% increase from the previous quarter. This impressive performance is largely attributed to continued growth in national housing values, which have consistently reached new record highs each month since late 2023.
Brisbane Leads in Profitability
Among the capital cities, Brisbane stood out as the most profitable market, with 99.1% of its resales turning a profit, followed by Adelaide (98.7%) and Perth (95.4%).
Meanwhile, Darwin and Hobart saw the largest quarterly increases in loss-making sales, with Melbourne and Sydney emerging as the second and third least-profitable cities after Darwin.
The strong profitability in Brisbane, Adelaide, and Perth reflects the robust capital growth seen in these markets in recent years, which has also contributed to shorter hold periods for those making a profit from resales.
However, despite these positive figures, the housing market may face challenges in the coming months. High interest rates, rising living costs, and affordability concerns could potentially limit buyer demand, especially as the market enters what is expected to be a busy spring selling season.
Units Under-perform Compared to Houses
While the overall profitability of property resales remains strong, the median resale loss across Australia was -$40,000 in the June quarter, with total losses amounting to $282 million. Most of the loss-making sales were units, accounting for 66.3% of all losses.
Notably, 70.6% of those loss-making unit resales occurred in Sydney and Melbourne, which together represented nearly half of all loss-making sales during the quarter.
In contrast, houses proved far more profitable, with a 97.2% rate of profit-making sales nationwide, compared to 89.4% for units. The median resale gain for houses was significantly higher at $340,000, compared to $185,000 for units.
Regional Markets Outshine Capitals
Regional markets outperformed capital cities in profitability, with 95.7% of regional resales delivering gains compared to 93.8% in the capitals. However, some regional areas, such as the WA Outback North, continued to experience losses, where property values remain 31% below their peak from the early 2010s.
Hold Period Trends
The median hold period for property resales across Australia remained steady at 8.8 years in the June quarter. Properties purchased around 2015 to 2016 have shown significant gains, as national home values have risen by 56% since that period.
However, Darwin was the only major market to record a decline in home values (-1.6%) over the same time frame.
Looking ahead, resale profits are expected to continue rising in the September quarter, though the market's strength could be tested by ongoing economic pressures, including high interest rates and inflation.