Australians are netting record profits from property sales, recent data shows.
CoreLogic’s “Pain and Gain” report for the June 2024 quarter showed resales making median nominal gains of $285,000, a record high going back to the early 1990s.
Of 91,000 resales during the year’s second quarter, 94.5 per cent recorded a nominal gain, one of the highest rates since June 2010.
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And profits totalled $31.8 billion during the quarter, up 7.7 per cent on the March quarter.
CoreLogic head of research Eliza Owen said the record median gain was driven by national housing values hitting fresh record highs each month since November last year.
“It also reflects sellers largely being empowered to time their resale for profit, given relatively stable conditions for mortgage serviceability,” Owen said.
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Owen said Brisbane claimed the top spot as Australia’s most profitable market, with a profit-making sales rate of 99.1 per cent.
This was followed by Adelaide at 98.7 per cent, and 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 have become the second and third least-profitable cities after Darwin.
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“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 said.
Owen said the rate of profit-making sales is expected to continue rising in the September quarter, in line with rising home values.
“However, 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,” she said.
“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.”
Houses remained more profitable than units through the June quarter, with a profit-making sales rate of 97.2 per cent nationally, compared to 89.4 per cent in the unit segment.
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.
Median gains for houses were $340,000, compared to $185,000 for units.
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