Australia’s housing market is creating wealth like never before.
Here’s stocktake of how things are going.
The money-making machine
In the past 10 years (June 2014 to June 2024), the total value of our residential dwellings has risen from $5.1 trillion to $10.9 trillion (+$5.78 trillion).
Since June 2020 alone, the value of our dwellings has increased by $3.6 trillion.
According to CoreLogic’s recent quarterly Pain and Gain Report, Australia’s property owners pocketed a record-breaking median nominal profit of $285,000 from resales in the June quarter of this year.
Nationally, the median nominal profit from house sales was $340,000 and for units it was $185,000 (both records).
But it was starker for individual suburbs.
For the Pain and Gain report, released this month, CoreLogic analysed roughly 91,000 resales in the June quarter.
It says the record-breaking gains home owners made from selling their properties was partly a result of national housing values hitting fresh record highs every month since November last year.
It says the record gains could also reflect the fact that many sellers had the ability to properly time their resale for profit “given relatively stable conditions for mortgage serviceability.”
But when breaking the data down into local government area regions (LGA), the report shows sellers in some regions of the country have been raking in the profits.
Sydney
In Sydney, sellers enjoyed the highest median nominal gains from resale of the capital city markets in the June quarter, at $353,000 across all dwellings, and a substantial $615,000 across houses.
For some individual LGAs, the median profit from resales was more than $450,000 — in the Hills district ($627,500), Hunters Hill ($627,500), the Northern Beaches ($550,000), Woollahra ($480,000), Waverley ($466,500), the Hawkesbury ($465,000), the Inner West ($460,000), the Blue Mountains ($458,000), and Wollondilly ($450,000).
Brisbane
Brisbane had the highest rate of profit-making resales among the capital cities in the June quarter, with 99.1 per cent of resales capturing a profit.
For individual LGAs, the median profit from resales was more than $300,000 in Redland ($388,500), Scenic Rim ($387,500), Brisbane ($345,000), Logan ($340,000), and Moreton Bay ($332,500).
Melbourne
In Melbourne, the rate of profit-making resales fell to 90.5 per cent in the June quarter, with almost one-in-10 sellers making a nominal loss from resale.
That included one-fifth of unit sellers.
But despite that relatively high rate of loss, the city still delivered the fourth-highest median gain from resales across the major cities at $306,000, behind Sydney ($353,000), Adelaide ($335,000), and Brisbane ($333,000).
Stagnant unit sales were the main culprit for the high rate of loss-making in Melbourne’s markets, with unit values sitting below a peak from June 2017.
For some individual LGAs, the median profit from resales was above $400,000 — in Nillumbik ($595,000), Bayside ($585,000), Whitehorse ($560,000), Manningham ($526,000), Mornington Peninsula ($477,000), Monash ($442,000), Boroondara ($415,000), Banyule ($413,500), Yarra Ranges ($404,170) and Knox ($401,500).
Perth
In Perth, the rate of profit-making from the resale of homes hit its highest level since mid-2014.
CoreLogic says Perth has seen an “extraordinary turnaround in the rate of profitability” since the pandemic period.
More favourable internal migration trends, an upswing in the resources sector and strong subsequent housing demand has seen the rate of loss-making on sales dive from 48.3 per cent in the June quarter of 2020 to just 4.6 per cent four years later.
Since the start of the pandemic in March 2020, Perth home values have seen the highest increase of any capital city market, up 72.5 per cent.
The rapid rise in profitability means Perth’s home-owners are holding onto their homes for much shorter periods. The median hold period (before re-selling a property) was almost 16 years at the start of 2020, but that has dropped to 9.8 years.
The median profit for properties re-sold in Cottesloe in the June quarter was $763,000.
The median profits for resales in Nedlands ($490,000), Joondalup ($377,750), Melville ($388,000), Fremantle ($321,000), Kalamunda ($310,000), Mundaring ($295,000), Rockingham ($283,500), Serpentine-Jarrahdale ($280,000), Armadale ($280,000), were above $275,000.
Source: Housing is Australia’s multi-billion-dollar money maker – if you’re selling, Gareth Hutchens, for ABC News