- During Q3 2021, 92.4% of resale transactions were profitable
- In Hobart all transactions were profitable
- The regions fared better than the combined capital cities
Profit making property resales across the country accounted for 92.4% of transactions in September quarter 2021, the highest proportion of profitability in more than a decade, according to CoreLogic’s latest Pain & Gain Report.
CoreLogic’s Head of Research Eliza Owen, highlighted the significance of this record given the quarter was riddled with lockdowns across Sydney, Melbourne and Canberra.
“The increase in the rate of profit-making sales is a reflection of strong capital growth across Australian dwelling markets despite COVID-induced disruptions to transaction activity.”
Eliza Owen, CoreLogic Head of Research
“The three months to September was the fifth consecutive quarter in which the rate of profit-making sales across Australia increased,” said Ms Owen.
CoreLogic’s report surveyed approximately 99,000 dwelling resale transactions in the quarter, a drop from 106,000 transactions in the June quarter.
Investors recorded fewer profitable transactions (89.7%) than owner-occupiers (95.5%).
House resales continued to fare better than units with 95% recording nominal gains, where units recorded 86.5%. But this gap is showing signs of narrowing according to Ms Owen.
“As affordability constraints limit growth in the detached house market and gradually deflect demand towards higher density housing options,” she said.
Profits by length of ownership
The report shows that the average length of ownership for sales was 8.8 years.
Ms Owens believes this may increase and peak in the coming years as more long term owners look to cash in on their gains.
“Properties held for more than 30 years had the highest median gain of just over $745,000,” Ms Owen said.
“However, the highest nominal gains per year were achieved by those on the other end of the spectrum, who have held property for two years or less. The median gain on resales of property held for less than two years was $120,000,” she said.
Regional Australia
Property resales in the regions had a higher rate of profitability at 93.1% in the quater compared to the combined capitals at 91.1%.
“Seachange and tree change markets have seen immense price growth over 2021,
She explained the level of migration to the regions has been stimulated by the shift to remote working, relative affordability, and labour market disruptions bringing forth retirement decisions.
