Nearly 90% of Australian house sellers scored hefty gains as property prices surge

author-avatar By on March 24, 2021
Nearly 90% of Australian house sellers scored hefty gains as property prices surge

Nine in ten Aussie homeowners who sold their property in the three months to December 2020 made a hefty profit amid insatiable buyer demand and roaring property prices.

Owner occupiers raked in a median gain of $255,000 while investors made $165,000 in profits on the sale of their property according to CoreLogic's Pain and Gain report.

“As property values rose across each state and Territory through the December quarter, buoyed by a cash rate reduction through November, the value of profits also increased substantially," said CoreLogic's Head of Research Eliza Owen.

Nationally, 89.9% of properties sold at a profit in the December quarter with total gains from resales rising to $31.9 billion, up from $24.8 billion in the previous quarter.

"The results are particularly significant given the uplift in sales volumes in the 3 months to December, much of which was driven by an increase in transaction activity across Melbourne," Ms Owen said.

"Sales and listings increased remarkably across the city, as the economy emerged from the weakness associated with the extended lockdowns."

Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Lender
Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval

VariableMore details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
VariableMore details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
VariableMore details
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
VariableMore details
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^

Rates correct as of October 26, 2021. View disclaimer.

Every capital city recorded a rise in the number of properties being sold for a profit, but it was Melbourne and Hobart that emerged as the most profitable cities. 

Hobart was the clear stand out, with 97.2% of properties being sold for a profit. 

Melbourne saw the second highest rate of properties being sold for a profit at 94.3%, reflecting the turn in Melbourne house prices which rose 1.5% as the city emerged from lockdowns.

Regional Australia continued to outperform their capital city counterparts, evidence of the emerging trend of buyers moving from capital cities.

See also: The rise of regional property during COVID

The number of properties that sold above the purchase price rose to 90.7%, up from 89.3% in the previous quarter.

That same number (89.3%) of capital city properties also sold above the purchase price. 

"However, capital city profitability has bounced back more rapidly from the September quarter, when profit making sales accounted for 87.5% of transactions," Ms Owen said. 

On a national level, the combined losses from resales shrank from $1.2 billion to $1 billion from the September to December quarter.  

Which Sydney, Melbourne and Brisbane suburbs saw the biggest price changes? 

House prices across the country are surging, but prices in Sydney, Melbourne and Brisbane in particular are reaching record highs.

Median house prices rose 6.7% annually across Sydney houses, 3.9% in Melbourne houses and 5.6% in Brisbane houses, according to Domain research.

Sydney suburb price growth

In Sydney, the median house price hit a new record high of $1,211,488, with house prices rising across almost all Sydney suburbs.

Of the suburbs Domain mapped, 94% saw growth while 43% recorded double-digit annual growth.

Leading the suburbs with the strongest growth was Alexandria, where prices surged by 30.6% to $1.9 million over the 12 months to December 2020.

But house prices in Marsfield fell as far as 10.1%. 

Melbourne suburb price growth

In Melbourne, the median house price hit a new record high of $936,073 – $28,000 above the previous record in early 2020. 

House prices in Blairgowrie increased by 24.8% over the 12 months to December, while the suburb of Clayton saw the steepest decline of 11.1%.

Brisbane suburb price growth

Across Brisbane, the median house price hit a new record high of $616,387 by the end of 2020. 

Suburbs that had the strongest rates of growth were recorded in Thorneside, where prices soared by 28.5%. 

Virginia, Highgate Hill, Carina Heights and Yeronga also recorded strong growth, with house prices surging more than 20% in the year to December. 

"The rising interest from interstate buyers and the movement of residents from regional Queensland into Greater Brisbane will continue to support demand," said Domain senior research analyst Dr Nicola Powell.

"Outer suburban and lifestyle areas will be the main beneficiaries."

However, 15% of suburbs recorded a fall in the media house price over the year, with the deepest fall of 8.4% recorded in Ormiston and Burpengary East.


Image by Steve Doig on Unsplash

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Great Southern Bank, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.

In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

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author-avatar
Emma Duffy is Assistant Editor at Your Mortgage and  Your Investment Property Mag, which are part of the Savings Media Group. In this role, she manages a team of journalists and expert contributors committed to keeping readers informed about the latest home loan and finance news and trends, as well as providing in-depth property guides. She is also a finance journalist at Savings.com.au which she joined shortly after its launch in early 2019. Emma has a Bachelor in Journalism and has been published in several other publications and been featured on radio.

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