Sellers cash in as profit levels hit 20-year high
Record property values are driving a surge in profitable resales, though losses are beginning to reappear in some markets.
There’s scarcely ever been a better time to sell a property.
With property prices at or near record highs around the country, the proportion of sellers offloading property at a profit has hit a 20-year high.
Cotality’s latest Pain and Gain report shows that 95.9 per cent of resales nationally are delivering a gain, marking one of the strongest outcomes on record and reflecting the cumulative impact of more than a decade of price growth.
The scale of those gains is also significant. Median resale profits have climbed sharply, with many vendors realising six-figure returns, particularly in markets that have experienced sustained price appreciation over multiple cycles.
A key driver of these results is time.
Owners who have held property for longer periods, particularly beyond 10 years, are far more likely to achieve substantial gains, benefiting from compounding capital growth and the ability to ride out market downturns.
Detached housing continues to lead the way.
Houses are consistently outperforming units on resale profitability, largely due to stronger land value growth and tighter supply. This trend has been most pronounced in capital cities, where demand for freestanding homes has remained resilient despite higher borrowing costs.
The headline figures do, however, mask growing variation beneath the surface.
While profitability remains historically high, in some areas the share of loss-making resales has started to edge higher, particularly in markets that have experienced price volatility over the past two years.
Sydney and Melbourne have recorded a modest uptick in properties selling at a loss, reflecting the impact of the recent interest rate tightening cycle and softer price conditions through parts of 2023 and 2024.
Properties sold at a profit had a median hold period of 9.2 years in the December quarter, compared with 8.2 years for those that recorded a loss. Loss-making house resales were held for a much shorter period, with a median of just over four years, aligning with purchases made around the pandemic-era market peak.
Cotality Head of Research, Gerard Burg, said profit-making houses were typically held for around 9.4 years, highlighting the importance of time in the market in determining resale outcomes.
“Shorter ownership periods remain the key risk factor for losses, particularly for those who purchased closer to recent market peaks,” Mr Burg said.
“The longer a property is held, the more likely it is to absorb cyclical fluctuations and deliver a positive result.”
Smaller capitals continue to outperform
Perth, Adelaide and Brisbane are recording some of the strongest resale outcomes in the country, supported by relative affordability, population inflows and constrained housing supply.
Nationally, 98.1 per cent of house resales recorded a profit, compared with 91.2 per cent of units. Median gains were also significantly higher for houses at $428,000, versus $246,500 for units.
Brisbane recorded the strongest profitability of any capital city in the December quarter, with 99.9 per cent of resales delivering a gain and a median profit of $500,000, underpinned by a decade of growth that has seen dwelling values more than double.
Adelaide was second, with 99.4 per cent of profitable resales and a median gain of $445,000, up from $404,000 in the previous quarter. Perth recorded a similarly strong result, with 98.6 per cent resales achieving a ‘gain’ and the median dollar value rising to $430,000 from $360,000.
This divergence highlights the increasingly localised nature of Australia’s housing market, where performance is being shaped by distinct economic and demographic drivers rather than a single national trend.
Profits not going away soon
For investors, the data reinforces a familiar lesson: timing and holding strategy matter.
While long-term ownership continues to deliver strong capital growth, shorter holding periods, particularly in higher-density unit markets, carry a greater risk of loss, especially if purchases are made near cyclical peaks.
Beyond individual gains, the report also points to broader structural challenges.
As more vendors exit the market with significant profits, the cost of entry for new buyers continues to rise, exacerbating affordability pressures and widening the gap between existing owners and aspiring entrants.
This dynamic is becoming increasingly pronounced as wage growth struggles to keep pace with property values, extending the time required to save a deposit and pushing home ownership further out of reach for many Australians.
Looking ahead, the outlook for resale profitability will hinge on interest rate settings, population growth and the pace of new housing supply.
Further monetary tightening could temper price growth in the short term, but persistent supply constraints are expected to underpin values over the longer term.
While conditions may be shifting at the margins, the vast majority of Australian property sellers are still walking away with substantial gains.
