Most property owners are still selling for more than they originally paid, although gains have become smaller and losses more common since the market peak.
According to Cotality’s latest Pain & Gain Report, 87.8% of residential properties resold in the March quarter achieved a gross profit. While still a strong result overall, that figure remains well below the peak of more than 99% recorded in late 2021.
The report also highlights the importance of long-term ownership. The median hold period for profit-making resales was 10.0 years, while loss-making resales had a much shorter median hold period of 4.2 years.
Longer ownership still key to building equity
Cotality Chief Property Economist Kelvin Davidson said the figures reflected a housing market that has remained subdued for an extended period.
“Property values have been broadly flat for some time, and the pain and gain figures are reflecting that same gradual downward shift rather than a slump,” he said.
“At the same time, hold periods for profitable resales have stretched to double digits, which may indicate some owners are waiting longer before bringing properties to market.”
The national median resale gain was $285,000, down from the record $440,000 recorded in 2021 but still above pre-covid levels. Meanwhile, the median loss was $54,000.
Mr Davidson said owners who purchased more recently were more exposed to softer market conditions. Buyers who purchased properties around 4.2 years ago had typically experienced only the weaker part of the property cycle, increasing the likelihood of a loss when selling.
Houses outperform apartments
The report also revealed notable differences between property types.
Houses continued to outperform apartments, with 88.7% of house resales generating a profit compared with 58.9% for apartments.
Mr Davidson said apartments had experienced weaker capital growth in recent years.
“Apartments generally experienced less of the post-covid boom than standalone houses, so they’ve had less of a buffer through the downturn.”
Investors were also slightly more likely than owner-occupiers to record losses. The share of profit-making resales was 88.9% for owner-occupiers compared with 86.3% for investors.
According to Mr Davidson, investors are often more exposed to apartments and shorter-term market movements, while higher mortgage rates, insurance costs and other expenses have placed additional pressure on rental property returns.
What this means for property owners
The report highlights the long-term nature of property ownership.
While short-term market conditions can fluctuate, longer holding periods have historically improved the likelihood of building equity and achieving a profitable sale.
Understanding how market conditions affect your equity position and future borrowing options is important when making property decisions. Contact us if you would like to review your mortgage structure, refinancing options or long-term property plans.
