New data shows record profits from property

Building wealth through property is a well-established financial principle, and the latest survey from industry researcher CoreLogic underlines the validity of this belief.

Homes selling in the June quarter delivered an average profit of $285,000 to the seller, according to the latest CoreLogic figures.

Whether you're a professional investor or the owner of a home, this is a substantial profit and the highest ever recorded by CoreLogic.

Its Pain & Gain report, which was launched in the early 90s, has found that an incredible 94.5% of properties sold made a profit for their owner – the highest figure since June 2010.

Nominal gains from resales totalled $31.8 billion, up 7.7% on the previous 12 weeks.

The median hold-period of resales across Australia remained steady at 8.8 years.

Even while Australians impatiently wait for interest rates to come down from their current 4.65% level, the market has been recording record highs in value for the past 21 months.

CoreLogic's Head of Research, Eliza Owen, said the record profit level reflected “sellers being empowered to time their resale for profit, given relatively stable conditions for mortgage serviceability”.

The top cities that delivered profit from their sales were Brisbane (99.1%), Adelaide (98.7%) and Perth (95.4%).

Profit-making sales are expected to continue in the immediate term, but “the depth of buyer demand to deliver higher and higher profits may be tested in the coming months”, said Ms Owen.

Two-thirds of the loss-making sales were units, of which 70.6% were in Sydney and Melbourne. Houses remained more profitable than units with a profit-making sales rate of 97.2% nationally, compared to 89.4% in the unit segment.

Across the combined regional lifestyle markets analysed, the rate of loss-making sales remains low at 2.7%.

Paulette Contessi

Director / Licensee

CONTESSI PROPERTIES