Homeowners made $31.7 billion this quarter and these cities delivered the biggest profits

WATCH: Property hotspots bouncing back

Profitability in Australia's housing market held steady during the March quarter of 2025, with 94.9 per cent of dwelling resales delivering a nominal gain, according to Coatality's latest Pain & Gain report.

While the share of profitable transactions remained stable compared to the December quarter, the median nominal gain edged down to $305,000 from $310,000 - the first drop since March 2023.

Despite this slight pullback, market analysts say the outlook is optimistic, bolstered by the Reserve Bank's interest rate cuts in February and May.

"Although profitability held steady in early 2025, we're seeing clear signs of renewed momentum," said Eliza Owen, Head of Research at Cotality.

"With rate reductions now flowing through to buyer demand and value growth, we expect stronger resale returns in the months ahead."

Brisbane, Adelaide and Perth lead the profit pack

Brisbane emerged as the national leader in profitable resales, with an astonishing 99.7 per cent of properties resold for a gain.

Adelaide followed closely at 98.9 per cent, also snatching the title of highest median resale gain among capital cities with a figure of $385,000 - ending Sydney's decade-long streak. Perth rounded out the top three with 97.9 per cent of resales turning a profit.

Conversely, Darwin recorded the highest rate of loss-making resales at 26.2 per cent, though this marked a significant improvement of 240 basis points from the prior quarter.

Melbourne fared slightly better, with 11.3 per cent of sales ending in a loss, the highest figure recorded since the late 1990s apart from February's 12.0 per cent.

In Sydney, 92.3 per cent of resales were profitable, a modest decline from 92.5 per cent the previous quarter.

Canberra and Hobart both performed solidly, with 94.5 per cent of transactions delivering gains, though Hobart saw a slight dip from 95.3 per cent in the December quarter.

Houses outshine units for profitability

House resales outperformed units significantly, with 97.2 per cent of houses selling for more than their previous purchase price, compared to 90.1 per cent for units. The median profit from a house resale stood at $355,000, 73 per cent higher than the $205,000 median gain for units.

Units also made up a disproportionate share of the 5.1 per cent of loss-making sales, accounting for 62.6 per cent of them.

View.com.au finance expert Jessica Brady said of the report: "Of course, it would be easy to say you should always buy houses over apartments based on this data, but for many the price point for houses is out of their budget."

"It does however, mean people who are purchasing an apartment may need to assume a lower growth amount and be aware of oversupply issues that may see them with little to no growth over their ownership period."

More than one in four loss-making unit sales occurred in just four local government areas: Melbourne (Vic), Parramatta (NSW), Port Phillip (Vic), and Stonnington (Vic), suburbs where unit prices have grown by just 2.0 per cent on average over the past decade.

Interestingly, the median loss for units ($44,000) was almost identical to that for houses ($45,000), reflecting perhaps more recent entry into the market for unit buyers.

Brady added: "New buyers are likely to be grateful that the growth of apartments has been considerably less than houses, as it means they may have a shot at getting in. But it's a double edge sword - because once you're in, you probably want the value to grow, so your equity isn't built by mortgage repayments alone"

Short-term sales on the rise

The median hold period for resold properties remained steady at 8.8 years, but there was a slight uptick in short-term sales. Properties held between two and four years accounted for 15.6 per cent of all transactions.

"These short-term sales may reflect fixed-term borrowers exiting during a rising interest rate environment," Owen noted, adding that this group experienced a higher rate of losses due to the price softness following rate hikes in 2022.

Despite a marginal drop in overall resale profits, the combined gross profit from resales in the March quarter totalled $31.7 billion, up from $30.2 billion a year earlier.

Meanwhile, total resale losses shrank to $258 million, down from $298 million the previous quarter.

With rate cuts already stimulating demand and home values climbing 1.3 per cent in the three months to May, market conditions suggest a rebound in profitability is on the horizon for Australian property sellers.

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