Property resale values continue to rise despite lockdowns

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Australia’s property market has continued to soar throughout periods of lockdown, with the latest CoreLogic report finding that the three months to September 2021 saw the highest level of profitability in real estate for more than a decade. 

The Pain & Gain report, which covers the September 2021 quarter, found that the rate of profit-making resales across Australia rose to 92.4%, up 50 basis points from the June quarter. 

“The three months to September was the fifth consecutive quarter in which the rate of profit-making sales across Australia increased,” said Corelogic head of research, Eliza Owen. 

Profit-making resales, when a property is solid for a profit on the price it was originally purchased for, have continued to rise as Australia’s real estate market grows stronger.

Resales had a typical hold period of 8.8 years, although properties held for more than 30 years had the highest median gain of over $745,000. Properties held for under two years had the highest nominal gains per year, with the median resale gains sitting at $120,000. 

House resales continued to have a higher chance of nominal gain than units, although the report noted that the gap is narrowing. Regional Australia also saw a slightly higher rate of profit from resales than the capitals, however both saw an increase in profitability throughout the quarter.  

The report noted a decrease in resale transactions during the period, with around 99,000 transactions analysed compared to 106,000 the previous quarter. Owen attributed this to social distancing measures, particularly the inability to physically inspect property across Melbourne. 

Corelogic found that the national median nominal gain was $270,000, with total resale profits at $27.3 billion. Meanwhile median losses sat at $37,000, with total resale losses at $368 million. 

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