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The Australian property market continues to deliver strong returns, with property resales reaching a record median profit of $285,000 in the June 2024 quarter, according to CoreLogic's latest Pain & Gain report. With 94.5% of all resales turning a profit, it’s clear that property remains a key wealth-building tool, especially for savvy investors who can time their sales strategically.


Key Insights for Investors:

  1. High Resale Profits: National resale profits hit $31.8 billion in the June quarter alone, up nearly 8% from the previous quarter. Strong capital growth continues to drive high returns, particularly in key cities like Brisbane, which had an impressive 99.1% profit rate, the highest in the country. Brisbane property profits have consistently outperformed other major cities, making it a standout market for investors seeking strong gains.


  2. Houses Outperform Units: Investors in houses saw significantly higher returns, with 97.2% of house sales making a profit compared to 89.4% of unit sales. The median gain for houses was nearly double that of units, at $340,000 versus $185,000. For those considering long-term investments, houses continue to be the safer bet in terms of profit potential.


  3. Regional Areas Still Strong: Regional markets outperformed capital cities, with 95.7% of regional property sales making a profit compared to 93.8% in the cities. However, there are emerging pockets of weakness in some regional areas, particularly resource-dependent regions like WA Outback North, which remain well below their peak values.


  4. Shorter Hold Periods in High-Growth Markets: Markets with strong recent capital growth, such as Brisbane, Adelaide, and Perth, have seen shorter hold periods for profit-making sales. This is a key insight for investors looking to buy, add value, and exit sooner rather than later.


  5. Challenges on the Horizon: While current market conditions remain positive, rising interest rates and cost-of-living pressures could temper buyer demand. This means investor caution is needed in the coming months, particularly as spring selling season heats up.


  6. Losses in Units, Especially in Sydney and Melbourne: Units continue to present higher risks for investors, particularly in Sydney and Melbourne, where loss-making sales accounted for nearly half of all unit resales. A focus on location and market demand is key when considering unit investments.



Brisbane property profits


Outlook for Investors:

Looking ahead, the trend of rising profits is expected to continue into the September quarter, driven by strong demand and rising property values. However, with potential challenges in the form of high interest rates and affordability issues, investors should approach cautiously and focus on markets with strong fundamentals.


Credit: This article is based on data from CoreLogic’s Pain & Gain Report (Q2 2024). Read full article here: https://www.corelogic.com.au/news-research/news/2024/australians-pocket-a-record-median-profit-of-$285,000-when-reselling-their-property







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