Australia’s property market continues to solidify its reputation as a reliable wealth-building avenue, with a significant surge in profit-making sales across the nation.
As housing remains a cornerstone of financial security for Australians, the latest data underscores the resilience and profitability of the property market, even in the face of economic challenges.
Domain’s Profit and Loss Report found that profit-making sales for residential properties have reached their highest levels since 2008 for houses and 2011 for units.
Nationally, 96 per cent of houses and 90.7 per cent of units resold for a profit in FY24, marking a notable increase in the market’s profitability.
This trend is particularly pronounced in regional Australia; it’s the first time since 2009 that a higher proportion of house owners in regional areas walked away with a profit compared to the cities.
The contrast is even more pronounced for units, with 94.6 per cent of regional units selling at a profit, compared to just 89.4 per cent in the cities.
The figures show that not only has there been an increase in profit-making sales over the past year, but it is at a 16-year high for houses and a 13-year high for units.
Domain’s Chief of Research and Economics, Dr Nicola Powell said that as Australia grapples with record pricing, it is unsurprising that the pool of profit-making sales has risen, as the likelihood of profitability increases as prices rise.
“This trend is more pronounced for houses than for units and various factors contribute to these differences, including housing preferences, development cycles, and tenure, as units are typically held for shorter periods,” Dr Powell said.
“Additionally, house prices have generally experienced higher rates of growth compared to unit prices.
Dr Powell said the remarkable profits we are seeing indicate how valuable it is for Australians to get into the property market if they can.
“We need to ensure that buying a home is affordable and accessible to everyone, as having an asset that increases in value can really help financial stability in the future,” she said.
The median profit is substantial but varies widely across all capital cities and regional Australia.
For houses, Sydney, Canberra, and Melbourne—our most expensive cities—understandably lead dollar gains, with profits of $655,000, $435,000, and $397,000, respectively.
For units, Sydney tops the list with a gain of $202,000, followed closely by Hobart at $198,000 and Adelaide at $175,000.
Conversely, the smallest dollar profits were recorded in Perth and Darwin.
“Losses are the true anomalies in the property market,” Dr Powell said.
“Due to the cyclical nature, some losses are inevitable, though they remain relatively rare. Transactions occurring at critical inflection points—when the market is changing direction—can be particularly challenging to navigate.
“For example, purchasing at a market peak just before a correction means buyers are paying off a mortgage based on peak prices while experiencing slower equity growth.
“This situation may lead some sellers to accept a loss based on their individual circumstances, particularly under the current ‘higher for longer’ cash rate.”
Generation X and older Millennials have been identified as the primary beneficiaries of the current market conditions.
The report indicates that this demographic has driven substantial wealth growth across various income levels, particularly in suburbs with a more diverse economic profile.
“Interestingly, this group, typically in their late 30s to late 40s, has leveraged their established positions in the property ladder to capitalize on the recent price boom,” Dr Powell said.
