Property sales leading to big profits for those selling their homes.

According to recent data, Australians are seeing massive profits from property sales, with a record-breaking median nominal gain of $285,000 in the June 2024 quarter. This is the highest amount seen since the early 1990s, and out of the 91,000 resales during this time, a staggering 94.5% recorded a gain. This is one of the highest rates seen since June 2010, and the total profits for the quarter reached $31.8 billion, a 7.7% increase from the previous quarter.

Eliza Owen, the head of research at CoreLogic, attributes this record-breaking median gain to the continuous rise of national housing values since November of last year. She also notes that sellers have been able to time their resales for profit due to relatively stable mortgage serviceability conditions. In fact, Brisbane has been named as Australia's most profitable market, with a profit-making sales rate of 99.1%. This is followed by Adelaide at 98.7% and Perth at 95.4%. However, Darwin and Hobart have seen an increase in the rate of loss-making sales, while Melbourne and Sydney have become the second and third least-profitable cities after Darwin.

Owen explains that the strong capital growth trends in Brisbane, Adelaide, and Perth have contributed to lower hold periods for profit-making sales. She also predicts that the rate of profit-making sales will continue to rise in the September quarter, in line with the continuous rise of home values. However, Owen also points out that the housing market may face challenges due to high interest rates, cost of living, and affordability constraints.

In terms of property types, houses have remained more profitable than units, with a profit-making sales rate of 97.2% compared to 89.4% in the unit segment. The rate of loss-making sales for houses was only 2.8%, while the unit segment saw a higher rate of 10.6%. Median gains for houses were also significantly higher at $340,000 compared to $185,000 for units.

With the spring selling season approaching, the market may face a test as the demand for higher profits may be challenged by high interest rates and affordability constraints. As always, CoreLogic's "Pain and Gain" report provides valuable insights into the current state of the property market in Australia. Stay updated on all the latest news, celebrity gossip, and sports updates by following our WhatsApp channel – no comments, no algorithms, and your privacy is protected. Stay informed with us.

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