Most people make a profit but some sellers made a loss in these areas
Sellers are more likely to make a profit selling their homes than at any point since 2005, but for a few high-density areas, profitability is far from guaranteed.
Approximately 95.9 per cent of Australian properties sold in the December 2025 quarter made a profit, according to data from Cotality Pain and Gain ReportShows aired on Wednesday.
This was up from 95.6 per cent in the September quarter and was the strongest result since March 2005.
Average earnings also hit a record high of $365,000 in the quarter.
Gerard Burg, head of research at Cotality, said data showed most sellers held their properties for around a decade, meaning profitability was more about long-term momentum than recent market performance.
“Things go up and down and the longer you hold on [on to your property] “It smooths out these cycles and increases your likelihood of a positive outcome,” he said. “The shorter the holding period, the more exposure you have to these cyclical elements.”
While the average holding period of properties sold at a profit was 9.2 years, this period was 8.2 years at a loss.
This difference was more pronounced for houses; In Melbourne, the median holding period for a loss was four years, while the median for a profit was 11 years. Sydney experienced 6.9 years of losses and 11 years of profit.
At the city level, smaller capital cities such as Brisbane, Perth and Adelaide dominate overall profitability, with around 99 per cent for all three, while Sydney recorded a profitability of 93.3 per cent.
Melbourne was the least profitable capital city after Darwin; only 91.5 percent of property sales turned a profit.
While it’s tempting to look at this negatively, Burg said it’s likely a reflection of the state government’s concerted effort to increase housing supply and encourage home ownership.
“If you look at this from a buyer’s perspective, especially a first-time buyer, it’s great news,” he said.
Housing type also affected profitability.
Nationwide, houses were more profitable than units; 98.1 percent of residences and 92.1 percent of units recorded profit.
This was reflected in areas more likely to lose money: high-density local government areas (LGAs) such as the City of Melbourne (45.9%) and more than a quarter of sales in each of Melbourne’s Stonnington and Port Phillip areas. In Sydney, 23.9 per cent of Parramatta dealers lost money and more than a fifth in Ryde and Strathfield. The city of Sydney was also among Sydney’s top 10, with sales losing 11.1 per cent.
These are all areas where large numbers of apartments have been built in the last decade, Burg said, impacting not only new development but also the value of existing properties in the neighborhoods.
“If we look at the city of Melbourne… the average value of a unit peaked in June 2017,” Burg said.
“That’s a common thread that we’re seeing in Stonnington, Port Phillip and areas around Sydney as well as Parramatta. Those are the areas where we’re seeing the really rapid increase.” [in apartments] … If you’re losing value over time, of course that makes it incredibly difficult to make a profitable sale.”
The limited profitability of units in these areas likely reflects the premium buyers are placing on new apartments, said Angie Zigomanis, head of data and insights at Quantify Strategic Insights.
“There are all kinds of tax benefits and depreciation benefits when people go off the plan,” he said. “And all that kind of stuff that the next buyer doesn’t necessarily have.”
He said the unit markets in Melbourne and Sydney were quite different, with flats in Melbourne more likely to be held by investors and homeowners in Sydney increasingly turning to flats as house prices fell.
“[Investors] “They probably have a more pragmatic view,” he said. “They sit there and say: ‘I haven’t seen a capital increase in five years. ‘Maybe it would be better to cut my losses and park my money somewhere else, where I can actually make a profit’. “This has an impact.”
Both Burg and Zigomanis think interest rate rises and the mounting pressures of war in the Middle East could mean data for the March quarter will look weaker than the December report.
But Zigomanis cautioned against over-reading the short-term effects, saying some sellers may have purchased 60 years ago.
Burg said the most concerning aspect about future profitability is global uncertainty.
“Risk is something you can plan for: you can take steps to mitigate it,” he said. “When there is uncertainty, there is nothing left… And that means people will sit on their hands more.”
