With property prices again on the rise, 96.3 per cent of sellers have locked in profits this year, according to new data.
Domain’s Tenure and Profit report, found that 97.8 per cent of houses and 91.7 per cent of units have resold at a profit in 2023 – above the historical averages of 95.9 per cent for houses and 91.7 per cent for units.
In the past 12 months, the smaller capitals saw the highest proportion of profitable resales, led by Canberra, Adelaide and Hobart.
Adelaide saw the proportion of profit-making resales grow to almost every sale (above 99 per cent), and it is also currently the only city to have record house and unit prices.
Canberra, Hobart, regional Victoria and regional Tasmania also saw profit-making resales above 99 per cent.
While, profitable resales reached 95.1 per cent in Sydney, 94.6 per cent in Melbourne and 98.3 per cent in Brisbane.
Overall, Sydney has the highest median resale profit at $410,000, followed by Canberra at $409,500 and Melbourne at $327,000.
Nationally, the median dollar profit in 2023 sits at $245,000, up from just $77,500 a decade ago.
Domain’s Chief of Research and Economics, Dr Nicola Powell, said across Australia, property sellers had walked away with a significant dollar uplift compared to their initial purchase price.
“The proportion of profitable resales remains consistently high, a trend expected to continue as Australia’s housing market recovers,” Dr Powell said.
“However, in certain localised areas, the landscape may appear different, as some motivated sellers might be more inclined to accept a loss against the backdrop of rising debt costs.
“In saying that, as prices continue to climb, the likelihood of this diminishes.”
Dr Powell said given the recent bounce in property prices across the country, and ongoing demand coupled with tight supply, conditions would likely remain good for sellers.
“The profitability is anticipated to remain strong, aligning with the ongoing price improvements, just in time for the spring selling season,” she said.
Meanwhile, the average holding period has gradually lengthened in many cities as homeowners move less often.
The most consistent tenure increases have been for houses in Sydney and Perth, and for units in Sydney and Melbourne.
Sydney’s increased tenure highlights housing affordability challenges and transactional costs, all of which discourage people from moving to homes that better suit their needs.
Typically, homeowners hold onto their property for 10 years in Sydney, Perth and Canberra, and nine years in Melbourne, Brisbane and Adelaide.
Darwin boasts the longest house tenure at 12 years, while Hobart is the shortest at seven years.
Dr Powell said tenure also tells us much about market dynamics, whether homeowners move more often or stay longer.
“Property price cycles can be a lever in driving tenure higher or lower because homeowners will delay or speed up selling decisions based on whether they think they can earn more or less if they hold on for longer,” she said.
“Over time, tenure has gradually lengthened, which is more evident for houses than units.”
In Sydney, houses in Strathfield-Burwood-Ashfield have one of the longest ownership lengths in Australia at 13 years.
For Melbourne, Whitehorse East and West have the longest tenure in the city at 13 years, while in Brisbane, Centenary and Sunnybank houses have the city’s longest tenures, at 14 and 13 years respectively.
While in Perth, houses in Joondalup have the longest tenure at 11 years, while units in Swan in Perth’s north-east is the third cheapest area and have the shortest tenure at six years.