The Australian property market continues to demonstrate sustained resilience, with the rate of profit-making sales and number of transactions increasing in the December 2023 quarter.
CoreLogic's latest Pain & Gain report analysed about 90,000 resales in quarter four last year, revealing 94 per cent of transactions recorded a nominal gain.
The median gross profit also saw an uptick to $310,000, marking an increase across all three metrics compared to the previous quarter's results.
CoreLogic research head Eliza Owen said the upward trajectory aligned with the sustained growth in home values observed throughout the year.
She said loss-making resales declined to 6pc of resales in the three months to December, to a median of $40,000, as the volume of loss-making sales also fell by 5.1pc from the previous quarter.
The total nominal profit from resales in the December quarter reached $29.9 billion, which was an increase from $28.7 billion in the previous quarter.
"The improvement in the key metrics of this report really highlight the improving profitability in the housing market since the recovery trend began in early 2023," Ms Owen said.
"We've observed a decline in the number of loss-making sales, which fell to just 5500 during the December quarter, even as overall transaction volumes increased.
"The broad-based increase in profitability and value across the Australian housing market helps to shore-up financial stability at a time of stark increases in mortgage costs for some households."
The December data also indicated a slight easing in short-term, loss-making re-sale conditions.
The portion of resales within a two-year hold period reduced from 7.9pc in the September quarter to 7.5pc.
But there was an uptick of resales with a hold period of between two and four years, from 13.3pc in the September quarter to 14pc.
"This change reflects homes that were bought in 2020 and 2021, and it turned out to be the most popular timeframe for reselling properties in the quarter," Ms Owen said.
"While some of these sales might have been influenced by a rise in mortgage rates, it's interesting to note that only 3.7pc of homes sold during this timeframe ended up making a nominal loss."
Regional markets outperformed capital cities in terms of profitability, with 95.5pc of resales in regional Australia making a nominal gain, compared to 93.2pc in combined capitals.
The increase in profitability was also more rapid across regional markets, indicating a strengthening trend outside major urban centres.
"Due to the lingering value add of the COVID-boom, regional markets are looking more profitable than capital cities," Ms Owen said.
"Regional markets typically have lower property prices and a different lifestyle appeal, and are outperforming capital cities in terms of profitability - potentially due to sustained demand, limited housing supply and a more favourable cost of living environment."
Adelaide remained the most profitable capital city market for the fifth consecutive quarter, with more than 98pc of re-sales making a nominal gain in the three months to December.
The Perth market also witnessed significant improvement in line with its high growth in home values, with the rate of loss-making sales reducing to 8.4pc - marking its most profitable period since July 2015.
Houses continued to deliver higher rates of profit-making sales compared to units, with 97pc of house resales making a nominal gain, compared to 88.2pc of units.
But Ms Owen said the gap in profitability between houses and units narrowed slightly, indicating a potential shift in market dynamics - including affordability and supply constraints.
"Underlying land value, scarcity factor and desire for more space through the pandemic has led to a substantially larger rise in house values relative to unit values in the past four years," she said.
"The relatively large premium on house values has put these out of reach for many, particularly first home buyers and lower-income households.
"As units become increasingly attractive to buyers, the price gap between detached housing and medium to high density options will close and the profitability of units will improve."
The median hold period of re-sales across Australia was nine years in the December quarter, making November 2014 the median initial purchase date for re-sales through the quarter.
Since that date, national home values have increased 63pc.
"As noted in previous reports, there are now several markets where the incidence of loss-making sales is associated with relatively short hold periods," Ms Owen said.
"Of the greater capital city and regional house markets, most loss-making sales have been held for less than three years.
"Loss-making unit sales were far more likely to be held for longer, due to weaker capital growth performance."
At the national level, loss-making house sales had a median hold period of 5.9 years, and loss-making unit re-sales had a median hold period of 8.4 years.
