The housing market may have lost some momentum, but most property owners who sell are still walking away with substantial gains. New resale analysis shows that weaker price conditions have only begun to affect profitability, with the overwhelming majority of transactions continuing to deliver a nominal profit for vendors.
Cotality’s latest Pain and Gain Report found that 95.4% of residential sales completed during the June quarter resulted in a profit. That was down slightly from 96.1% in the previous quarter, indicating that softer housing conditions are beginning to flow through to resale results. Even so, profitability remains exceptionally high when viewed against longer-term market trends.
Brisbane continues to stand out among the capital cities. An extraordinary 99.8% of Brisbane resales during the quarter delivered a profit, making it the strongest capital city market on this measure. Adelaide followed with 98.9% of transactions recording a gain, while Perth was close behind at 98.8%.
Hobart also remained highly profitable for existing owners, with 97.6% of sales achieving a gain. Sydney recorded a lower result of 92.7%, while Melbourne had the weakest profitability rate among the capital cities at 89%.
Those differences demonstrate how varied the housing cycle has become between cities. Brisbane, Adelaide and Perth have benefited from significant price growth in recent years, helping existing owners build substantial equity. Markets that have experienced weaker growth or larger concentrations of apartments have produced a greater share of loss-making transactions.
The size of the gains is also significant. Nationally, sellers who achieved a profit recorded a median gain of $371,000 during the June quarter. Brisbane again led the capital cities, with sellers achieving a median profit of $525,000.
The figures underline the considerable equity accumulated by many homeowners during the strong growth periods of the past five years. Even where prices have recently softened, owners who purchased well before the latest market peak can still be sitting on substantial increases in value.
Regional property markets also performed strongly. Regional areas recorded a higher proportion of profitable transactions than the combined capital cities during the quarter. Houses similarly continued to outperform units when resale profitability was compared across property types.
Holding periods provide another important part of the picture. Cotality found the median ownership period for a profit-making resale was 9.1 years nationally. For properties sold at a loss, the median holding period was shorter at 8.1 years.
That difference highlights the importance of time in the market. Owners who have held property for nine or 10 years have generally moved through several different stages of the property cycle. Periods of strong growth can create an equity buffer capable of absorbing shorter periods of falling or stagnant values.
Recent purchasers do not have the same protection. Buyers who entered the market closer to a peak have had less opportunity for capital growth to accumulate before conditions changed. If those owners need to sell relatively quickly, a modest decline in values can have a much greater effect on the final resale result.
Cotality Head of Research Gerard Burg says the amount of equity accumulated during recent years remains one of the major reasons profitability is holding up despite weaker market conditions.
That does not mean the downturn is having no effect. The decline from 96.1% profitable sales in the previous quarter to 95.4% in June suggests the direction is beginning to change, even though the movement remains relatively modest.
The distinction between houses and units is particularly important. Houses have generally produced stronger resale outcomes, while loss-making unit sales have been more concentrated in markets where apartment values have experienced weaker long-term growth. Cotality’s broader June-quarter analysis showed 97.8% of house resales made a gain compared with 90.5% of unit resales.
For property owners, the results are a reminder that short-term price movements do not necessarily determine whether a sale ultimately produces a profit. Purchase timing, property type, location and, importantly, the length of ownership all influence the final result.
For buyers, however, the figures also reinforce the need to consider the possibility that market conditions can change after purchase. Someone buying today cannot rely on the strong gains achieved by owners who entered Brisbane, Adelaide or Perth years earlier.
While resale profitability has moved down from its recent peak, the June-quarter figures remain very strong by historical standards. With 95.4% of sales nationally still producing a nominal gain and Brisbane recording profits on 99.8% of transactions, the softer market has so far reduced the size and frequency of gains rather than fundamentally reversing the position of most established property owners.
