Corelogic head of residential research Eliza Owen said that while nationally, profit-making property sales had increased for four consecutive quarters, a number of headwinds were combining to potentially drag on, or even reverse growth in the medium term.
“While profitability is expected to trend higher across Australia in the coming quarters, it is clear that the rate of profit-making resales mirrors the trends we’re seeing in city and regional capital growth rates,” Owen said.
“As the rate of increase in values slows, as we have started to see each month since April, so too will the momentum in profitability.
“We’re closely monitoring affordability constraints, a tighter credit environment, a resurgence in listings volumes, and some economic factors including a slowdown in the resources sector.”
In Victoria, Ballarat led the way, achieving a record high rate of profitability with 99.7 per cent of resales in the quarter achieving gains.
Other top performers included the Richmond-Tweed region, where dwellings sit 29.5 per cent higher over the year; the Sunshine Coast, where values rose 27.6 per cent; and the Launceston and North-East housing market, where dwelling values are up 26.3 per cent.
Meanwhile, inner-city markets have gone into overdrive with 97.6 per cent of houses in Sydney sold at a profit—an increase of 8 per cent on the previous month to now be at the highest level of profit-making gains in almost four decades.
Average profits for sales in regions such as Ku-ring-gai, Mosman, Woollahra and the Northern Beaches are now topping $1 million.
In Melbourne, the highest profits were achieved in Bayside, Nillumbik and Boroondara while loss-making sales were affected by border closures and weak inner-city rental market.
Brisbane, where profit-making resales have been above 90 per cent mark since January 2018, experienced an 18 per cent surge across its unit market buoyed by buyers arriving from Victoria and NSW.