CoreLogic has released its quarterly ‘Pain and Gain’ report for the December quarter, which analyses the proportion of dwelling resales that made a nominal gain (or loss) relative to the previous purchase price.
The latest analysis was based on 98,000 sales through the December quarter, where CoreLogic observed the property had previously sold.
Based on the observations, 89.9% of sales saw a nominal gain through the December quarter, up from a recent low of 87.4% in the three months to June.
The median profit on resales across Australia through the December quarter was $230,000, up from $200,000 in the previous quarter.
The increase in the rate of profit making sales coincides with a turn in housing market performance from the December quarter, the 112 day lockdown started to ease across Melbourne, and national housing values rose 2.3%.
The Pain and Gain report highlights some usual trends across Australia’s housing market.
The portion of resales making a nominal gain was higher among houses (92.7%) than units (81.3%).
Owner occupiers generally had a higher incidence of profit (92.2%) than investors (84.9%).
| Highest incidence of profit making sales by State, LGA - December 2020 Quarter | |||||
|
Greater capital city or regional area |
LGA Name |
% Gain |
% Loss |
Median profit |
|
| Regional NSW | Bellingen | 100.0% | 0.0% | $ 302,500 | |
| Regional NSW | Mid-Western Regional | 98.8% | 1.2% | $ 170,500 | |
| Regional NSW | Coffs Harbour | 98.8% | 1.2% | $ 218,000 | |
| Regional NSW | Murray River | 98.8% | 1.3% | $ 128,750 | |
| Regional NSW | Bathurst Regional | 98.7% | 1.3% | $ 145,500 | |
| Regional Qld | Noosa | 98.1% | 1.9% | $ 339,000 | |
| Brisbane | Somerset | 96.7% | 3.3% | $ 90,000 | |
| Regional Qld | Sunshine Coast | 96.0% | 4.0% | $ 206,500 | |
| Brisbane | Redland | 94.1% | 5.9% | $ 144,000 | |
| Regional Qld | Gympie | 93.8% | 6.3% | $ 115,000 | |
| Adelaide | Tea Tree Gully | 98.0% | 2.0% | $ 116,000 | |
| Regional SA | Alexandrina | 97.9% | 2.1% | $ 126,250 | |
| Adelaide | Mount Barker | 96.7% | 3.3% | $ 234,000 | |
| Adelaide | Burnside | 96.3% | 3.7% | $ 252,500 | |
| Adelaide | Unley | 96.2% | 3.8% | $ 209,500 | |
| Regional TAS | Burnie | 100.0% | 0.0% | $ 98,600 | |
| Regional TAS | Devonport | 99.3% | 0.7% | $ 116,000 | |
| Regional TAS | West Tamar | 99.1% | 0.9% | $ 131,000 | |
| Regional TAS | Launceston | 98.9% | 1.1% | $ 134,000 | |
| Hobart | Glenorchy | 97.9% | 2.1% | $ 190,000 | |
| Regional VIC | Mildura | 100.0% | 0.0% | $ 113,750 | |
| Regional VIC | Warrnambool | 100.0% | 0.0% | $ 130,500 | |
| Regional VIC | Ballarat | 99.5% | 0.5% | $ 191,000 | |
| Regional VIC | South Gippsland | 99.5% | 0.5% | $ 198,000 | |
| Regional VIC | Campaspe | 99.4% | 0.6% | $ 117,000 | |
| Regional WA | Augusta-Margaret River | 90.4% | 9.6% | $ 280,000 | |
| Regional WA | Busselton | 88.1% | 11.9% | $ 232,000 | |
| Perth | Mundaring | 84.1% | 15.9% | $ 201,503 | |
| Perth | Joondalup | 82.7% | 17.3% | $ 122,500 | |
| Perth | Cambridge | 82.1% | 17.9% | $ 282,500 | |
With most Australian housing markets experiencing price increases through the first few months of 2020, it is expected that the proportion of profit making sales will continue to rise at the national level.
It is worth noting that these results are the gross profit between the original sale price and the transaction over the December 2020 quarter, and does not take into account transaction costs, or costs incurred for maintenance or improvements to the property.
Recent weeks of flooding, if not the past 12 months of extraordinary events, have shown that housing market activity, and ownership and transaction costs, can quickly change the outlook for profitability in real estate in certain markets.
