CoreLogic’s June quarter Pain & Gain report has revealed the highest level of profitability for property sellers in a decade:
Key findings for Pain & Gain, June Quarter 2021
- Around 106,000 dwelling resales were analysed for the June quarter Pain & Gain report.
- Of those 91.5% recorded a nominal profit-making gain from the previous purchase price.
- The median hold period of those resales was 8.8 years.
- Property owners who resold after just two years pocketed a median return of $123,000.
- Property owners cashing in after more than 30 years of holding a property, achieved a median return of $712,000.
- 99.7% of residential properties resold in the Ballarat SA4 region in the June quarter achieved a gain for the vendors.
- In regional Victoria, 98.7% of all dwelling resales in June made a nominal gain.
- In Sydney, 97.6% of houses sold for a nominal gain, the highest level since 1982.
- The main drivers for the record resale gross profits are tight listings and low mortgage rates.
- Loss-making sales were affected by border closures and weak inner-city rental markets.
The next chart shows the national percentage of properties that sold for a profit (91.5%) against capital growth:
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Profitability is especially high across the capital cities, excluding Perth and Darwin:
Whereas the proportion of houses sold for a profit in the June quarter (94.4%) were far higher than for units (84.7%):
As expected, profits are higher the longer a property has been held:
Commenting on the report, CoreLogic’s Head of Research Eliza Owen noted that “nationally, profit-making residential property sales have increased for four consecutive quarters”:
The typical median hold period on all resales for the quarter was 8.8 years, with a national median gross resale profit of $265,000. Median gross losses for the same period were -$43,000…
“Such high levels of profitability may start to encourage vendor participation and bring down typical hold periods, especially as major cities navigate a path out of 2021 lockdowns”…
“While profitability is expected to trend higher across Australia in the coming quarters, it is clear that the rate of profit-making resales mirrors the trends we’re seeing in city and regional capital growth rates”.
“As the rate of increase in values slows, as we have started to see each month since April, so too will the momentum in profitability”.
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