- CoreLogic's Pain & Gain reported revealed the average profit on homes sold in the June 2024 quarter was $285,000
- Nearly 95% of homes sold for a profit, one of the strongest rates in 14 years
- The average hold time of a property was 8.8 years
- Brisbane was the strongest profit-making market, with 99.1% of homes sold in the black
- While Perth is buoying WA, signs are weak in regional areas, with prices in the Outback North nearly a third lower than in the early 2010s
CoreLogic's Pain & Gain report for the second quarter of the year showed property resales delivered a median nominal gain of $285,000, the highest since the series began in the early '90s.
Of the 91,000 transactions analysed over the period, 94.5% recorded a profit-making sale, one of the highest rates since June 2010.
According to CoreLogic head of research Eliza Owen, the record median gain was driven by national housing values hitting fresh highs each month since November 2023.
By the end of the second quarter, the national median property price stood at $794,000, up 0.7% from the month prior.
It had risen further to just over $802,000 by the end of August.
Since earlier this year, national home values have consistently increased by 0.5% to 0.8% each month, on the back of strong demand outstripping low supply.
Overall, Australians pocketed $31.8 billion in the June quarter, a 7.7% increase from the first quarter of 2024.
Brisbane leads the pack in profitability
The Queensland capital emerged as Australia's most profitable property market, posting a profit-making sales rate of 99.1%, meaning nearly all resale transactions netted gains.
Adelaide came in second at 98.7%, while Perth clinched the third spot at 95.4%.
Mid-sized capitals continue to outshine Melbourne and Sydney, which 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.
The median hold period of resales across Australia was 8.8 years in the June quarter; this places the median initial purchase date of resales around the September quarter of 2015.
Ms Owen expects profit-making sales to continue rising well into the September quarter.
"However," she noted, "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."
Regions outperform capital cities
The preference for regional homes over those in the capitals remained evident in CoreLogic's report, which found the rate of profit-making sales in the regions (95.7%) was higher than in the capital cities (93.8%).
However, pockets of weakness are emerging in parts of regional Australia.
"While resource-based markets generally continue to show an uplift in value and improvement in profitability, the WA Outback North market has seen sellers continue to absorb losses, where values remain 31% lower than the highs of the early 2010s," Ms Owen said.
Houses more profitable than units
Houses remained more profitable than units through the June quarter, with a national profit-making sales rate of 97.2%, compared to 89.4% in the unit segment.
"Not only were units (10.6%) around four times more likely to make a loss from resale than houses (2.8%), but the median nominal gain from house resales was almost twice as large as that of units," Ms Owen noted.
The median profit from the resale of houses is around $340,000, while it's $185,000 for units, both record highs.
"At a high level, the outlook for unit owners looks promising, with unit profitability expected to improve in the short term," she added.
"Demand for units may increase in the coming months, as buyer demand pivots from the relatively expensive detached house sector."
This shift is expected to be fuelled by investors who are increasingly favouring units over houses.
According to buyers agent George Cherchian, affordability and cash flow are driving investors away from detached dwellings and towards apartments.
Citing Sydney as an example, Mr Cherchian shared, "Someone on an average Sydney salary can realistically aspire to invest in a unit, not so much because the price point is lower than with a house but because the deposit hurdle is much lower."
"Even though interest rates appear to have peaked, investors are much more focused on interest rates today than a few years ago.
"That means they're looking for properties that are going to deliver relatively strong cashflow, and units tend to outperform houses when it comes to yield."
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