Record profits for sellers hitting an average $285,000
Property sellers are making an average of $285,000 off the back of residential real estate transactions.
PROPERTY sellers are making record profits off the back of residential real estate transactions.
The median nominal gain from resales in the June quarter was $285,000, according to CoreLogic’s Pain and Gain report.
They are the highest figures since the booming market of the early 1990s.
Of the roughly 91,000 resales over the period, 94.5 per cent of transactions recorded a nominal gain.
That’s one of the highest rates since June 2010.
Nominal gains from resales totalled $31.8 billion in the June quarter, up 7.7 per cent from the March quarter.
“The record median gain is driven by national housing values hitting fresh record highs each month since November last year,” CoreLogic’s Eliza Owen says.
“It also reflects sellers largely being empowered to time their resale for profit, given relatively stable conditions for mortgage serviceability.”
Brisbane claimed the top spot as Australia’s most profitable market, with a profit-making sales rate of 99.1%.
This was followed by Adelaide at 98.7%, and Perth at 95.4%.
Darwin and Hobart saw the biggest quarterly increase in the rate of loss-making sales across the capitals, while Melbourne and Sydney have become the second and third least-profitable cities after Darwin.
“Looking ahead, the rate of profit-making sales is expected to continue rising in the September quarter, in line with home values rising,” Ms Owen added.
“However, the housing market faces some headwinds to demand in the form of high interest rates that are ‘higher-for-longer’, high cost of living and constrained affordability.
“Combined with what is looking like a robust spring selling season, the depth of buyer demand to deliver higher and higher profits may be tested in the coming months.”
On the flipside, the median of losses from resale across Australia was -$40,000, with a median proportional loss of -6.8%, totalling $282 million, up 2.5% from $275 million in the March quarter.
However, that figure was far from the largest combined loss from resales, which was a combined $531 million loss in the three months to November 2020.
Of the loss-making resales across Australia, the majority were units (66.3%), 70.6% of which were in Sydney and Melbourne.
