Almost 95% of property resales delivering a profit

Australian property owners are seeing more boosts to their equity, with new figures showing that the vast majority of dwellings resold in the March quarter delivered a profit.

According to the latest Pain & Gain Report from Cotality, 94.9% of resales in the March quarter achieved a nominal gain – meaning they sold for more than their previous purchase price.

While this was unchanged from the December quarter, it’s still a historically high rate of profitability. Nationally, the median profit earned by vendors was $305,000, although this marked a slight drop from $310,000 in the previous quarter. This was the first decline in median resale profits in two years.

Capital cities vs regions

Profitability remained higher in regional areas than in capital cities – a trend that has been in place since 2019. In the March quarter, 96.5% of regional resales were profitable, compared to 93.9% in capital cities.

This reflects the continued price growth and popularity of regional lifestyle areas, particularly since the pandemic. Regional hotspots like Busselton in Western Australia, and Noosa and the Sunshine Coast in Queensland, recorded some of the strongest profit increases over the past five years.

Houses vs units

As in previous quarters, houses continued to outperform units.

Cotality found that 97.2% of house resales delivered a profit, compared to 90.1% of unit resales. Median profits from houses were also significantly higher, at $355,000 compared to $205,000 for units.

However, unit profitability did show signs of improvement, rising slightly from 89.9% in the December quarter.

Market outlook

The report noted that profitability rates closely mirror national home value movements. With home prices rising by 0.9% during the March quarter, and a further 1.3% gain recorded in the three months to May, Cotality expects profitability to strengthen again in the June quarter.

For sellers holding onto their property for the long term, the outlook remains positive. Nationally, the median hold period for profitable sales was 8.9 years – reflecting the benefits of long-term ownership.

If you've built up equity in your property, you could use this to fund the deposit on an investment property or renovations. Get in touch to find out how.