Profits Hold Steady
The vast majority of property sellers in the first quarter of 2025 did so for a profit.
Cotality’s latest Pain and Gain report shows 86,000 established dwellings sold during the quarter and of those, 94.9% sold for more than the original purchase price.
Sellers made a median gain of $305,000. Of the 5.1% of sellers who didn’t make a profit, the median loss was $44,000.
The report shows that the longer an owner holds on, the higher the chance of making a profit, with the median hold period of a profit-making resale at 8.9 years.
Brisbane has the highest level of profit-making sales, with 99.7% of transactions achieving more than the original purchase price during the quarter.
It is followed by Adelaide, 98.9%, Perth, 97.9%, Hobart, 95.4%, ACT, 94.5%, Sydney, 92.3%, Melbourne, 88.7% and Darwin, 73.8%.
Regional South Australia is the most profitable across the regions, with 97.9% of home sellers in the region making a nominal gain, up from 97.8% in the previous quarter.
New Home Sales Hit High
Sales of new homes hit a 13-month high in May, according to the Housing Industry Association’s New Home Sales report.
The report, which is compiled by surveying the largest volume builders in Australia, says new home sales are up by 6.9% during the month.
HIA Senior Economist, Maurice Tapang, says the figures show demand remains high.
New South Wales and Victoria have increased sales volumes, following two years of weakness.
“This increase is the first suggestion of an improvement in market conditions in these states,” Tapang says.
Sales in Queensland remain stable, according to Tapang, following on from record sales levels in the previous month and a strong upward trend in the past 12 months.
Sales fell in South Australia and Western Australia during May but Tapang says levels remain “robust”.
He says even with a recovery in market confidence, there remains a shortage of housing in Australia due to the regulatory barriers to increasing supply.
Market Sentiment High
The majority of investors are confident about the performance of the property market in the coming months, a new investment report shows.
The Momentum Wealth Property Sentiment Report 2025 shows that despite significant price increases in the past two years, Perth remains a favourite location for interstate investors.
Melbourne is the second-favourite capital city for investment in 2025, despite significant new taxes and fees on property investment in the city.
Melbourne is enjoying a lift in interest as buyers believe it has potential for future growth. Buyer demand in Melbourne drove it to achieve an auction clearance rate of 77.5% last weekend – its highest result since May 2023.
Brisbane is the third most appealing capital city for investors, according to the report followed by Sydney.
A third of respondents say they plan to buy an investment property in the next 12 months.
Analysis by Finder shows why so many investors are keen to buy property, with the asset class in many locations out-performing even superannuation funds.
It says the average 10-year performance across all super funds is 5.7% per year, which is below the ten-year compound property growth rate of many capital cities, including Hobart (6.9%), Adelaide (6.7%) and Brisbane (5.9%).
Population Surges
Australia’s population is continuing to grow, with Western Australia the most popular destination.
New data from the Australian Bureau of Statistics shows that in the final quarter of 2024, Australia’s population grew by 91,133 people to reach 27,400,013. It is up by almost 450,000 over the year.
In the past quarter, Western Australia is up by 2.4%, Victoria and Queensland are both up by 1.9%, ACT, 1.4%, New South Wales, 1.3%, Northern Territory, 1.2%, South Australia, 1.1% and Tasmania, 0.3%.
Cameron Kusher from Oz Property Insights says population growth is an important market of further demand in property markets.
He says while the rate of population growth has slowed a little, it is still elevated and sits at levels not previously recorded since 2017.
“(It) is adding to significant demand for infrastructure and housing at a time in which we aren’t building enough of either,” he says.
“The high rate of population growth will continue to fuel demand for housing, mostly rental housing, and maintain the upward price pressures despite limited wage increases for most households. Rental affordability will continue to be a challenge for households.”
Small City, Big Result
One of Australia’s smaller capital cities has been named as the best performer for house price growth in the past 20 years.
The latest Australian Property Institute (API) valuation report says Adelaide houses had an average growth of 175% between 2005 and 2024.
Australian Property Institute Chief Executive John Winter says the great “untold” story of Australian housing over the past two decades has been the resurgence of the nation’s smaller cities over the larger ones.
Hotspotting’s latest Price Predictor Index says the Adelaide market has been rising for longer than any other jurisdiction in Australia, and there is no sign of any slowdown in sales activity.
The API report says Hobart was the second best performer with growth of 172%, followed by Sydney, 171%, Brisbane and Melbourne, both 169%, and Perth, 123%.
“Seeing growth outside of the behemoth centres of Sydney and Melbourne really is a reminder that as those two cities are getting bigger, people are going to start looking for other opportunities, and it’s going to drive prices up in other areas,” Winter says.
QUOTE OF THE WEEK
Cameron Kusher, Oz Property Insights
“The high rate of population growth will continue to fuel demand for housing, mostly rental housing, and maintain the upward price pressures despite limited wage increases for most households.”
