Overview
- Australia’s housing downturn ended the recent record run of resale results, with the share of profitable June quarter sales falling to 95.4% (from 96.1% in March) and the median gain dropping to $371,000 (from $378,000 previously).
- Houses maintained a major advantage over units, with 97.8% of house sales yielding a gain versus 90.5% of units, while Sydney and Melbourne accounted for 83.3% of unit loss value.
- Brisbane retained its spot as the most profitable capital city (99.8% of resales profitable), while WA local government areas (Chittering, Cambridge, and Joondalup) recorded Australia's highest median gains.
- Time in the market provided key protection, as profitable resales were held for a median of 9.1 years compared to shorter hold periods for loss-making properties with this trend particularly evident for houses.
Australia’s housing downturn has ended the recent run of record resale results, with the share of profitable sales falling from a 21-year high and the median gain retreating from its March peak.
Cotality’s latest Pain & Gain report analysed more than 94,000 residential resales in the June quarter, finding 95.4% delivered a nominal profit, down from a 21-year high of 96.1% in March. The median gain also eased from a record $378,000 to $371,000, while the median loss increased from $44,000 to $45,000.
The number of resales analysed also fell from almost 101,000 in the March quarter, as national dwelling values declined 1.5% over the three months to June.
Cotality Head of Research Gerard Burg said the results marked a modest change in resale conditions after several years of strong value growth left many homeowners with a substantial equity buffer.
“Profitability is still exceptionally high by historical standards, but we are starting to see the impact of weaker housing market conditions flow through to resale outcomes,” Mr Burg said.
“Most sellers are still benefiting from the significant value growth accumulated over the past five years, which is providing considerable protection against the early stages of the downturn. With home values falling across more markets, that buffer will become increasingly important in determining resale outcomes.”
Years of growth still protecting most sellers
Time in the market continues to provide significant protection against short-term fluctuations in home values, with profitable resales held for a median 9.1 years nationally in the June quarter.
Loss-making resales had a shorter median hold period of 8.1 years, with the difference particularly pronounced for houses. Houses sold for a profit had typically been held for 9.3 years, compared with 4.4 years for loss-making house resales.
Mr Burg said the shorter hold period placed many loss-making house purchases around 2022, when home values were close to their previous peak before rising interest rates triggered a national slow down.
“Owners who have held their property for nine or 10 years have generally experienced several periods of value growth, giving them a much larger equity buffer when market conditions weaken,” he said.
“Recent buyers have had much less time to accumulate those gains and are therefore more exposed when values fall, particularly if they bought close to a market peak.
“However, longer ownership doesn’t always guarantee a profit, and the results vary considerably by market and property type, but the likelihood of a profitable resale generally increases with time.”
WA housing boom ousts profitable lifestyle markets
Western Australia’s recent housing boom has pushed three of its local government areas to the top of Australia’s most profitable resale table, replacing perennial lifestyle performers including Kiama on the NSW South Coast and Noosa in South East Queensland.
Chittering, north-east of Perth, recorded the highest median nominal gain in the country at $872,500 in the June quarter, after dwelling values increased by more than 180% from their pre-pandemic lows in 2019.
Cambridge in Perth’s inner west ranked second with a median gain of $740,000, followed by Joondalup in the city’s north at $732,500.
Kiama on the NSW South Coast followed with a median gain of $725,000, while Noosa on Queensland’s Sunshine Coast ranked sixth at $711,000.
Unit losses concentrated in Sydney and Melbourne
Houses retained a substantial profitability advantage over units in the June quarter, with 97.8% of house resales delivering a nominal gain compared with 90.5% of units.
The difference was also reflected in the size of the return, with profitable house resales recording a median gain of $435,500 compared with $251,000 for units.
Loss-making unit sales were heavily concentrated in Sydney and Melbourne, which together accounted for 83.3% of the value of unit resale losses nationally.
In Melbourne, 20.8% of unit resales recorded a loss, compared with 4.3% of houses, while 11.4% of Sydney unit resales sold below their previous purchase price.
Almost 39% of the value of all unit resale losses nationally was concentrated in five LGAs, Melbourne, Parramatta, Stonnington, Port Phillip and Sydney.
Mr Burg said the results reflected the much stronger capital growth recorded by houses over the past decade, alongside weaker conditions in some established apartment markets.
“The national median house was 36.5% more expensive than the median unit in June, compared with a premium of 21.2% five years ago, which gives some indication of how far the two sectors have deviated,” he said.
“Unit losses are also highly concentrated. Most apartment owners are still selling for a profit, but the risk of a loss is considerably higher in parts of Sydney and Melbourne where value growth has been weaker. In the Melbourne and Parramatta LGAs, unit values are still below peaks recorded back in mid-2017.”
Brisbane holds top spot while Adelaide gains hit record
Brisbane retained its position as Australia’s most profitable capital city in the June quarter, a title it has held since June 2024, with 99.8% of resales delivering a gain and sellers pocketing a median profit of $525,000.
Adelaide ranked second for overall profitability at 98.9%, while its median gain increased from $472,000 in March to a record $480,400. Perth followed, with 98.8% of resales recording a profit and a median gain of $470,000.
Mr Burg said Brisbane, Adelaide and Perth had each recorded sizeable increases in home values since the pandemic, after their relative affordability attracted increased buyer interest and population growth.
Melbourne recorded the lowest share of profitable resales among the capitals at 89.0%, down from 90.7% in March, with the median gain falling to $278,000.
Downturn puts recent buyers at greater risk
Regional markets continued to record a higher rate of profitable resales than the combined capitals in June, with 97.5% of regional transactions delivering a gain compared with 94.1% across the capitals.
Profitable capital-city sellers however recorded the larger windfall, with a median gain of $415,000 compared with $324,500 across regional Australia.
Mr Burg said the June quarter marked the beginning of a more challenging period for resale profitability, after Cotality’s national home value index peaked in March and subsequently entered a downturn.
“Affordability and mortgage serviceability were already constraining buyers before the downturn, with three interest rate increases in the first half of 2026, higher cost-of-living pressures, weaker consumer sentiment and changes affecting property investors adding further pressure on housing demand,” he said.
“There is significant uncertainty around the short-term economic outlook, particularly the direction of interest rates and increasing pressure on household budgets. If housing values continue to fall, we would expect that to place further downward pressure on resale profitability over the coming quarters.”
