Housing downturn ends record profit run for sellers

A recent analysis by Cotality reveals Brisbane properties achieved a median profit of $525,000 from resale sales in the June quarter. This makes Brisbane the most profitable city for sellers, despite a nationwide drop in property prices. Cotality's head of research, Gerard Burg, predicts lower prices will persist for some time. Even as the housing market softens, most sellers are still benefiting from the substantial value growth accumulated over the past five years, which provides substantial protection against early signs of the downturn.

However, Melbourne's unit market is struggling, with 20.8% of units sold at a loss, and approximately one in ten Sydney units sold below their purchase price. Houses tend to yield profits more consistently than units, with 97.8% of houses making a gain versus 90.5% of units. Nationally, sellers earned a median profit of $371,000, with 95.4% of the over 94,000 resales analyzed resulting in a profit.

Burg highlights that the buffer of accumulated value growth over the last half-decade offers considerable protection against early stages of the economic downturn. He notes that the demand for units in Brisbane is strong, contrasting with Melbourne's challenging market conditions due to over-growth in the previous five years. Adelaide and Perth also rank among the most profitable capitals, with median gains of $472,000 and $470,000 respectively.

Regional markets performed better than capital cities, with a 97.5% profitable resale rate compared to 94.1% for major cities. Metro sellers earned a median gain of $415,000, compared to $324,500 for regional sellers. Burg suggests that the downturn may harm recent buyers, as homes held for shorter periods are more likely to be sold at a loss.

The median time between purchase and a profitable resale is typically 9.3 years, while a loss-making house stays on the market for an average of 4.4 years.