The Australian property market has seen a notable increase in profit-making sales all over the country, a recent study by property technology and services marketplace Domain found.
In its Profit and Loss report, it was found that residential properties saw that their profit-making sales had reached the highest levels recorded since 2008 and 2011, for houses and units, respectively.
“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. Nicola Powell, Domain chief of research and economics, said in the report.
On a national scale, the report further said that about 96% of houses and 90.7% of units had been resold for profit in FY24. This served as proof of the market’s profitability, with the trend being more pronounced in regional areas in the country.
For the first time since 2009, there was a higher proportion of homeowners in regional areas that had earned profit compared to those in cities, with 94.6% of regional units being sold at a profit compared to the 89.4% in cities.
“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,” said Powell.
Houses in the most expensive cities which are Sydney, Canberra, and Melbourne, had respective profits of $655,000, $435,000 and $397,000. For units, Sydney, Hobart, and Adelaide take the lead with $202,000, $198,000, and $175,000.
The report found that there was a shift when it comes to the dynamics in the property market as regional areas notably outperformed urban areas when it comes to profitability. As this trend began in 2021 with regional units being sold at higher profit margins, the cause of this shift is attributed to factors such as lower upfront costs, greater pricing resilience, and structural change in buyer preferences due to the pandemic.
