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CoreLogic’s latest Pain & Gain report for the December quarter of 2024 has found that 94.8 per cent of sellers made a nominal profit across the country, with the median nominal gain reaching a series high (since the mid-90s) of $306,000.
Total gains from resales were $35.6 billion, up from $35 billion during the September quarter of 2024.
The report analysed 95,300 resales over the quarter and found that Australia’s property market continues to deliver strong profitability despite mixed market conditions, declining growth, and lower clearance rates, CoreLogic’s head of research Eliza Owen said.
While dollar value returns hit this new high, the report said that the percentage of sellers making nominal profits fell from 95.1 per cent in the previous quarter, reflecting the drop in national home values toward the year’s end.
Additionally, median losses for the December quarter rose from $40,000 to $45,000 (with a rate of 5.2 per cent), with units having a loss-making sales rate of 10.1 per cent, up from 9.3 per cent during the September quarter, while houses were less likely to see a loss with only 3 per cent of houses selling for less than the previous price.
This loss-making figure stood above the five-year average of $39,180, with total losses increasing from $267 million in the September quarter to $302 million.
“This subtle increase in loss-making sales makes sense, because any decline in real estate values increases the chance of loss-making sales occurring,” Owen said.
“Given the strong relationship between capital growth and the rate of profitability and expected further easing in the cash rate this year, the rate of profitability from home resales will likely recover in 2025.
“Loss-making resales were, on average, held for a shorter amount of time than profit-making sales.”
Indeed, the report found that more than a third of loss-making resales in the three months to December had a short hold period of up to four years.
According to Owen, shorter selling times increase the risk of making a loss due to exposure to short-term cyclical movements, where “value gains in property are generally long-term”, and she said that 26.5 per cent of loss-making sales had a hold period of two to four years.
She further said that this makes sense due to how many housing markets are yet to recover record-high values reached in 2022, just prior to the RBA’s monetary policy tightening cycle.
Around one-third of suburbs are below dwelling values recorded in April 2022, CoreLogic said.
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