Australians made a record $295,000 median profit when reselling residential properties in 2024, even with value gains in the market slowing down during the year.
CoreLogic’s latest “Pain and Gain” report for the September quarter shows that despite lower capital growth, falling clearance rates, and tougher market conditions, most vendors are still seeing solid profits when putting property up for sale.
The details
CoreLogic’s latest “Pain and Gain” report examined 95,000 resales during the September quarter of 2024.
It shows that when selling, the median profit owners pocketed hit $295,000 — the highest since CoreLogic began keeping records in the mid-1990s.
Only 5% of owners nationally made a loss when they sold a property, and the median loss was stable at $40,000, slightly up from the five-year average of $39,000.
It’s the lowest number of sales resulting in losses since 2008.
In total, profits from resales in the September quarter reached almost $34 billion, a rise from the previous quarter, while losses amounted to $270 million, down from $292.4 million.
CoreLogic's Head of Research, Eliza Owen, says the strong performance of resales came during a period of 0.8% growth in national home values through the September quarter, supported by reasonably strong housing demand and a stable lending environment.
“A decline in home values is only a problem for sellers if they have issues servicing home loan repayments, or are in some other circumstance where they need to sell,” she says.
“Otherwise, homeowners can simply hold their properties back from the market until such time there is stronger buyer demand.
“That being said, there are still clearly pockets of pain where home sellers need to offload their property in spite of weak market conditions, or values remaining substantially below previous record highs,” Ms Owen says.
Nevertheless, with 95% of sellers making a profit, there’s a lot more gain than pain.
Not an even picture
However, it’s not an even picture across the country.
Apart from a blow-out in the small number of sales in Darwin (31.2% sold at a loss), in the capital cities, Melbourne had the highest rate of loss-making sales in the quarter at 9.9%, and it was the only city where this rate increased compared to the previous quarter.
7.3% of properties sold in Sydney in the quarter notched up a loss.
On the other hand, Brisbane remained the most profitable city, with 99.4% of resold homes making a profit.
Booming Perth also saw a rise in profitable sales to 96.9%.
Houses were still much more profitable than units, with just 2.9% of house sales nationally making a loss, compared to 9.4% for units.
The median gain for houses was $345,000, compared to $200,000 for units.
“For the series of loss-making sales going back to the mid-90s, units have always had a higher chance of making a loss,” CoreLogic’s Eliza Owen says.
She attributes this to supply factors and the fact that units are the preferred dwelling type for investors, with generally higher rental yields.
“Investors are also potentially in a better position to sell at a loss because they may be able to offset that loss on future capital gains from property,” she says.
Short-term resales
When it comes to short-term resales, the number of homes held for less than two years before being resold dropped to 6.3%, down from 7.0% in the previous quarter.
Losses on these sales were lower, but Eliza Owen says some buyers who purchased between 2020 and 2022, when the cash rate was at emergency lows, are now feeling the impact of rising mortgage rates.
Overall, the median time Australians are holding onto properties before reselling is now 9 years, up from 8.8 years in the previous quarter.
Property values have risen 57.7% nationally since 2015, according to CoreLogic.
However, performance has varied across the country, with some areas seeing significant gains, like regional Tasmania (87.7%), and others, like Darwin (-3.2%), experiencing declines.
Resource-rich areas like Central Queensland, South Australia, and Western Australia saw strong growth in resale profits, with 91.1% of resales making a profit.