Aussie property market continues to shine as profits and sales rise in December quarter

The Australian property market has shown remarkable resilience, with the latest Pain & Gain report from CoreLogic revealing an increase in the rate of profit-making sales and the number of transactions in the December quarter of 2023.

The report analysed approximately 90,000 resales, finding that 94% of transactions recorded a nominal gain, with the median gross profit rising to $310,000.

Eliza Owen, CoreLogic’s Head of Research, said the positive results align with the sustained growth in home values observed throughout the year.

“The improvement in the key metrics of this report really highlight the improving profitability in the housing market since the recovery trend began in early 2023,” she said.

“We’ve observed a decline in the number of loss-making sales, which fell to just 5,500 during the December quarter, even as overall transaction volumes increased.”

The report also noted a slight easing in short-term, loss-making resale conditions, with the portion of resales within a two-year hold period reducing from 7.9% in the September quarter to 7.5%.

Regional markets outperformed capital cities in terms of profitability, with 95.5% of resales in regional Australia making a nominal gain, compared to 93.2% in combined capitals.

“Due to the lingering value add of the COVID-boom, regional markets are looking more profitable than capital cities,” Ms Owen explained.

Adelaide remained the most profitable capital city market for the fifth consecutive quarter, with more than 98% of resales making a nominal gain.

Houses continued to deliver higher rates of profit-making sales compared to units, with 97.0% of house resales making a nominal gain, compared to 88.2% of units.

The median hold period of resales across Australia was 9.0 years in the December quarter, with national home values increasing 63% since November 2014, the median initial purchase date for resales through the quarter.

“As noted in previous reports, there are now several markets where the incidence of loss-making sales is associated with relatively short hold periods,” Ms Owen said.

The total nominal profit from resales in the December quarter reached $29.9 billion, an increase from $28.7 billion in the previous quarter.