What were the most profitable housing markets in the December quarter?

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.

Property PriceBased 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%).

Pain And Gain 2

Pain And Gain 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.

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Eliza Owen

About

Eliza is head Of Residential Research Australia for Corelogic and a respected property market commentator. Eliza holds a first class honours degree in economics from the University of Sydney


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