The top 20 local government areas where more homeowners are selling at a loss
While the vast majority of sellers enjoyed a profit, in some parts of Australian cities others are licking their wounds
5 min
The Australian property market has recorded 17 consecutive months of growth overall, as limited supply and high demand in most markets continue to trump the impact of higher interest rates. The median Australian home value lifted 8 percent over FY24, but not every part of the market is strong.
The profitability of resold properties provides an insight into how home or investment property ownership can go right and wrong, with a key factor being the length of time the asset is held. CoreLogic’s latest Pain and Gain report reveals 94.3 percent of 85,000 resales in the March quarter sold at a profit. That’s the highest rate of profitability since July 2010 and reflects recent strong selling conditions in most markets except Victoria and Tasmania.
The median gain per profitable resale was $265,000. Houses were more likely to resell at a profit, with 97.1 percent of house resales profitable compared to 89 percent of apartment resales. The flipside to the data is 5.7 percent of all resales resulted in a loss. The median amount of that loss was $40,000, however, that’s just in the value of the property. It does not factor in the significant costs of buying the property, such as stamp duty; nor the selling costs, such as the agents’ fee.
CoreLogic’s Head of Research Eliza Owen said short-term resales indicate how households are responding to higher interest rates. According to the report: “The two-year resales trend seems to have peaked in the year to August 2023, roughly two years after the peak in fixed term borrowing back in 2021. This data suggests the sticker shock from higher mortgage rates may have had some influence on decisions to sell more property than otherwise would have transacted after a short hold period.”
The median hold period of all resold homes was 8.8 years in the March quarter. “Time in the market rather than timing the market is critical to maximising returns for most resales,” Ms Owen said. “Generally, the longer a vendor holds a property the higher the returns, with vendors selling after 30 or more years attracting the largest median gain of $780,000.” By comparison, the median gain among profitable resales that occurred within two years of purchase was $82,000.
Within the top 20 local government areas (LGAs) of each capital city where the highest proportion of loss-making sales occurred, a common theme was shorter hold periods for the loss-making sales compared to the profit-making sales in 14 of those 20 areas.
Here are the top 20 capital city LGAs for the most loss-making sales in the March quarter.
Melbourne LGA
Loss-making sales totalled 38.9 percent of all resales in Melbourne. The median hold period among loss-making sales was 9.8 years and the median capital loss was $54,500.
Perth LGA
Loss-making sales totalled 38.4 percent of all resales in Perth. Vendors who sold at a loss held their properties for a median of 11.5 years and the median loss was $54,000.
Darwin LGA
Loss-making sales totalled 33.6 percent of all resales in Darwin. The median hold period among loss-making sales was 10.4 years and the median capital loss was $70,000.
Stonnington LGA, Melbourne
Loss-making sales totalled 29.8 percent of all resales in Stonnington. Home or investment owners who sold at a loss held their properties for a median of nine years. The median loss was $57,000.
Palmerston LGA, Darwin
Loss-making sales totalled 26.5 percent of all resales in Palmerston, which is a satellite city to Darwin. The median hold period among loss-making sales was 10.2 years and the median loss was $82,000.
Parramatta LGA, Sydney
Loss-making sales totalled 25.3 percent of all resales in Parramatta. The median hold period among loss-making sales was 7.8 years and the median capital loss was $49,750.
Yarra LGA, Melbourne
Loss-making sales totalled 24.7 percent of all resales in Yarra. Owners who sold at a loss held their properties for a median of 8.2 years. The median loss was $40,000.
Port Phillip LGA, Melbourne
Loss-making sales totalled 23.9 percent of all resales in Port Phillip. Vendors who sold at a loss held their properties for a median of 8.7 years and the median capital loss was $42,000.
Strathfield LGA, Sydney
Loss-making sales totalled 22.8 percent of all resales in Strathfield. The median hold period was 7.4 years and the median loss was $60,000.
Ryde LGA, Sydney
Loss-making sales totalled 22.4 percent of all resales in Ryde. The median hold period among loss-making sales was 7.8 years. The median capital loss was $51,500.
Burwood LGA, Sydney
Loss-making sales totalled 20.9 percent of all resales in Burwood. Home or investment owners who sold at a loss held their properties for a median of just 5.3 years and the median loss was $63,500.
Vincent LGA, Perth
Loss-making sales totalled 20.5 percent of all resales in Vincent. The median hold period among loss-making sales was 10.2 years. The median loss was $40,000.
Maribyrnong LGA, Melbourne
Loss-making sales totalled 20.4 percent of all resales in Maribyrnong. The median hold period was 6.7 years and the median capital loss was $37,250.
Boroondara LGA, Melbourne
Loss-making sales totalled 19.7 percent of all resales in Boroondara. Property owners who sold at a loss held their assets for a median of 9.1 years and the median loss was $40,000.
Moonee Valley LGA, Melbourne
Loss-making sales totalled 17.9 percent of all resales in Moonee Valley. The median hold period was 7.3 years. The median capital loss was $41,000.
Belmont, Perth
Loss-making sales totalled 17.4 percent of all resales in Belmont. The median hold period among loss-making sales was 10.1 years and the median loss was $35,000.
Cumberland LGA, Sydney
Loss-making sales totalled 15.4 percent of all resales in Cumberland. Home or investment owners who sold at a loss held their properties for a median of 7.2 years. The median loss was $35,000.
Subiaco LGA, Perth
Loss-making sales totalled 14.3 percent of all resales in Subiaco. The median hold period among loss-making sales was 10 years and the median loss was $50,000.
Victoria Park LGA, Perth
Loss-making sales totalled 13 percent of all resales in Victoria Park. The median hold period was 10.2 years. The median capital loss was $42,500.
Sydney LGA
Loss-making sales totalled 12.6 percent of all resales in Sydney. The median hold period among loss-making sales was 7.2 years and the median loss was $57,000.
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Australia’s housing affordability crisis is being fuelled by chronic undersupply, planning delays and rising development costs, as politicians continue to focus on the wrong solutions.
3 min
Australia’s housing crisis will not be solved by first-home buyer incentives or tax changes alone, with leading property figures warning governments must tackle supply constraints if affordability is to improve.
Speaking at the Kanebridge Quarterly Property Leadership Summit in Sydney last week, expert project marketing specialist Sam Elbanna, property investor and fund manager Paul Miron and property consultant Karla McNeice said that a lack of housing supply remained the central issue facing the market.
Elbanna, Director of CPM Realty with more than 30 years’ experience in project sales, argued that successive governments had focused too heavily on stimulating demand rather than addressing the barriers preventing new housing from being delivered.
“The misconception is that politicians think the way to solve the housing crisis is to drive demand,” he said.
“The reality is that’s not the way. This is a supply-side problem, and it needs to be solved on the supply side.”
Drawing on his experience in project sales, Elbanna said policies designed to help first-home buyers often had unintended consequences, pointing to previous grants that ultimately flowed through to higher property prices.
Instead, he said developers were facing increasing red tape, approval delays and rising costs, which were discouraging new housing supply.
“In the absence of stock, demand exceeds supply,” he said.
Miron, a Co-Founder and Fund Manager of Msquared Capital, said the housing debate had become overly focused on tax policy while overlooking broader structural issues.
He argued that affordability challenges stemmed from a combination of factors, including planning constraints, supply shortages, migration levels and interest rates.
“No-one can be 100 per cent certain on the real reason for property prices is going up,” he said.
“The reason why property prices are higher is a combination of interest rates, lack of supply, migration, vacancy rates and maybe taxes play a role.”
Miron was critical of recent federal housing policy changes, warning they could reduce the number of new homes being built and further constrain supply that was even highlighted in the budget.
He also highlighted the importance of the property sector to the broader economy, noting that residential real estate and related industries employed more than one million Australians.
McNeice, who advises developers on sales strategy and market intelligence, said understanding buyers had become increasingly important as affordability pressures intensified.
While affordability remained a major consideration, she said today’s buyers were focused on value rather than simply price.
“People are looking for value for money,” she said.
She said buyers were increasingly evaluating factors such as transport connections, walkability, nearby amenities and flexible living spaces that could accommodate changing family needs.
“What infrastructure is going on? Can I walk to the shops? Can I meet people at the local cafe?” she said.
The panel also discussed the mounting pressures facing developers, with Elbanna arguing that many projects become financially unviable from the moment a site is purchased.
“The viability of a development happens at the moment the site is bought,” he said.
He said rising construction costs, higher interest rates and overly optimistic feasibility assumptions had left some developers exposed as market conditions changed.
While acknowledging the growing number of smaller and first-time developers entering the market, Elbanna said property development required expertise across finance, construction, marketing and legal disciplines.
“It is actually a business that requires a level of expertise,” he said.
Looking ahead, the panel agreed opportunities remained in the market despite current challenges.
Miron said property should continue to be viewed as a long-term investment and cautioned against trying to time short-term market movements.
McNeice said success would increasingly depend on identifying projects that genuinely met changing buyer expectations.
Elbanna said affordable housing remained achievable, but developers needed to deliver more than just homes.
“We can provide affordable housing in this country,” he said.
“But we’ve got to wrap that affordable housing with the things that people want.”
As Australia’s housing affordability debate intensifies, the panellists agreed on one point: without a meaningful increase in housing supply, demand-side measures alone are unlikely to solve the nation’s property challenges.
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