Australians cash in on record profits – but will it last?

If you’ve been wondering how profitable selling property has become in Australia, the latest CoreLogic Pain & Gain report (Q2 2024) has the answer. The median profit from property resales hit a record $285,000, with a staggering 94.5% of transactions making a profit. But with affordability constraints and high interest rates, will this trend continue?

Let’s break it down.

What’s Driving Record Resale Profits? CoreLogic analysed 91,000 property resales across Australia, uncovering key insights into the latest market trends:

🔹 94.5% of all property resales were profitable, one of the highest rates since 2010. 🔹 The total resale profit in the June quarter surged 7.7% from Q1 2024, hitting $31.8 billion. 🔹 Houses outperformed units, with a 97.2% profit-making rate compared to 89.4% for units. 🔹 Brisbane led the nation, with an incredible 99.1% of home sales turning a profit.

Which Markets Made the Biggest Gains? 📍 Brisbane took the top spot, with 99.1% of property sales profitable—thanks to strong capital growth in recent years.

📍 Adelaide (98.7%) and Perth (95.4%) also saw exceptionally high profitability rates.

📍 Sydney and Melbourne have become the second and third least profitable capital cities, trailing only Darwin in loss-making sales.

Are There Loss-Making Resales? While most sellers are making strong profits, some markets have struggled:

🚨 Darwin and Hobart saw the biggest quarterly increases in loss-making sales. 🚨 The median resale loss was -$40,000, though this is far from the record $531 million combined loss recorded in 2020. 🚨 Units were four times more likely to sell at a loss than houses, with 66.3% of all loss-making sales being units. 🚨 Sydney and Melbourne accounted for almost half (46.8%) of all loss-making unit sales.

Houses vs. Units: Which Are More Profitable? 🏡 Houses continue to outperform units, with a 97.2% profit-making rate compared to 89.4% for units. 🏡 The median resale gain for houses was $340,000, nearly double that of units ($185,000). 🏡 However, unit profitability is expected to improve in the short term as affordability pressures drive buyers away from detached homes.

What’s Next for the Property Market? While resale profits remain strong, some factors could test the market’s resilience:

✅ Interest rates are expected to stay higher for longer, potentially cooling demand. ✅ Affordability constraints remain a challenge, especially in capital cities. ✅ A strong spring selling season could increase supply, testing buyer demand. ✅ Unit demand may increase, as buyers pivot away from expensive detached houses.

CoreLogic’s Eliza Owen expects the rate of profit-making sales to rise in the September quarter, but warns that high borrowing costs could limit future price gains.

What Does This Mean for You? 📌 Thinking of selling? If you’re in a high-growth market like Brisbane or Adelaide, now could be a great time to list. 📌 Buying? Sydney and Melbourne’s unit markets could offer opportunities, with prices stabilising. 📌 Investing? Strong regional performance suggests opportunities outside capital cities.

Considering your next property move? Let’s chat and make sure you’re in the best position to maximise your gains.