More homes selling for a profit in 2019/2020

In the last quarter of 2019 property resales data has shown that home owner made a gross $18.7 billion profit. A higher proportion of properties are reselling for a greater profit, which is a relative indicator of market strength. All of this occurred despite the fact that the proportion of profit-making resales has fallen as property prices trended lower last year, according to Corelogic’s quarterly “pain and gain” report.

Australia’s house prices are now 20 per cent higher than they were in 2008 after recording the biggest quarterly jump in more than a decade over the December quarter.

Corelogic’s resales data analyses the performance of property resales, providing a temperature check on recent and longer-term market conditions.

Hobart is the top performer, with 98.1 per cent of homes turning a profit over the quarter. Regional Victoria and regional Tasmania followed close behind, at 96.6 per cent and 96.4 per cent respectively.

Corelogic head of residential research Eliza Owen said that Hobart’s large capital gains over the past five years has translated into strong results for resellers: “Brighton, Derwent Valley and Glenorchy recorded 100 per cent of resales at a gross profit [while] 98.5 per cent of units [in Hobart] turned a gross profit over the quarter compared with 98 per cent of houses.”

“Pain” % change, houses“Gain” % change, units“Pain” % change, houses“Gain” % change, units
Sydney7.992.112.587.5
Rest of NSW5.794.37.992.1
Melbourne3.496.615.085.0
Rest of Vic.3.196.95.894.2
Brisbane5.494.636.563.5
Rest of Qld14.185.924.875.2
Adelaide7.692.423.676.4
Rest of SA18.581.520.379.7
Perth32.967.152.048.0
Rest of WA41.059.063.736.3
Hobart2.098.01.598.5
Rest of Tas.3.696.43.796.3
Darwin39.061.061.838.2
Rest of NT24.375.742.957.1
Australian Capital Territory3.196.921.178.9
National10.090.019.880.2

In Sydney, 90.2 per cent of resales were profitable with Mosman resellers experiencing the highest gains (98.6%) followed by Waverley (96.3%), and Hunters Hill (95.5%).

Melbourne’s house market, which surpassed the $850,000 mark for the first time in 2019, recorded a 93 per cent profit-making resale rate over the quarter. Macedon Ranges (100%), Moorabool (98.9%) and Melton (98.3%) led the way.

Meanwhile, Brisbane is still seeing the hangover of an oversupply of investor-grade development in the past decade with with just 63.5 per cent of Brisbane units reselling for a profit over the quarter compared to 94.6 per cent of houses. Thankfully for Brisbane unit owners the oversupply of apartments has now largely disappointed so we would expect to see a higher percentage of units reselling for a profit moving forward as the market strengthens.

The lowest proportion of profit-making resales were recorded across the Lockyer Valley Council with 82.9 per cent.

Darwin recorded the lowest proportion of profit-making resales with just 51.7 per cent of properties making a profit, while regional Western Australia (56.9%) and Perth (63.6%) not following far behind.

Written: 14 February 2020

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