Home sellers are making money more consistently than at any point in the past 20 years, but that headline result masks clear fault lines in the market. In a small number of high density suburbs, particularly those dominated by apartments, a significant share of owners are still selling at a loss.
Investor Partner Group’s https://investorpartner.com.au/ review of resale data shows that 95.5 per cent of homes sold in the September quarter achieved a higher price than their previous purchase. That figure was up slightly on the June quarter and marks the strongest profitability result since 2005.
The median gain rose to $335,000, reflecting another quarter of price growth across most capital cities.
Moxin Reza from Investor Partner Group said the numbers were largely a function of how far values have risen over the past five years.
“When prices continue to move higher, even modestly, the pool of sellers who can exit at a loss shrinks,” he said. “But that doesn’t apply evenly across every market.”
The divide between houses and units remains one of the clearest lines. Almost all house resales were profitable, while around one in ten unit sellers still recorded a loss.
“Houses benefit from scarcity,” Reza said. “Apartments do not, especially where supply has been added in large volumes over a short period.”
Brisbane delivered the strongest results for house sellers, followed closely by Perth and Sydney. Melbourne trailed the other capitals, but profitability for houses remained high.
The picture changes when looking at units. In Melbourne, fewer than 81 per cent of unit resales made a profit, the weakest outcome of any major capital city. Sydney performed better, but still lagged the detached housing market, while Brisbane’s unit sector remained the most resilient.
Reza said Perth’s turnaround had been particularly striking.
“Five years ago, close to half the market was selling at a loss,” he said. “Now it’s almost the opposite. That tells you how quickly a market can reprice when demand returns and excess stock is worked through.”
Melbourne’s apartment market, long weighed down by oversupply and weak investor demand, has shown early signs of stabilisation. Unit values have risen about 2.7 per cent this year, helped by lower interest rates and rental yields approaching 7 per cent in some areas.
Losses, however, remain concentrated in specific inner city locations. Nearly half of resales in the Melbourne City Council area were loss making in the September quarter. Stonnington and Port Phillip also recorded elevated levels of losses.
In Sydney, Parramatta had the highest share of loss making resales, followed by Strathfield and Ryde. Reza said these areas had seen heavy apartment development and limited price growth since the pandemic.
“These markets haven’t fallen sharply,” he said. “They’ve just gone sideways for long enough that recent buyers haven’t had time to build equity.”
Across the country, five local government areas accounted for more than a third of all loss making unit resales: Melbourne, Parramatta, Port Phillip, Sydney and Stonnington. While conditions in each have improved, the legacy of the off the plan apartment boom of the 2010s continues to shape outcomes.
“That period added a lot of stock at high prices,” Reza said. “When lending tightened and foreign demand pulled back, values had nowhere to go.”
Looking ahead, Reza expects resale outcomes to become more uneven.
“There’s a growing gap between people who bought before the pandemic and those who bought after,” he said. “Most of the easy gains have already been made.”
Recent buyers, particularly in apartment heavy suburbs, face higher risk if they need to sell in the near term.
PRD chief economist Diaswati Mardiasmo said the imbalance comes back to supply.
“Houses are released slowly and often only change hands due to life events,” she said. “Apartments can be delivered in bulk.”
She said risk was highest in markets dominated by one and two bedroom units.
“When that stock makes up most of the market, sellers are competing against each other,” she said. “Larger apartments tend to be more insulated.”
The latest data shows that while most homeowners are still exiting with a profit, the margin for error is narrowing, and where you bought is becoming just as important as when.
