92.9% of homes sold for a profit in March quarter

The vast majority of properties are being sold for a gross profit, although the share of profitable resales has recently declined, according to CoreLogic's latest Pain & Gain Report.

In the first quarter of 2024, 92.9% of homes sold for a gross profit, compared to 93.5% in the previous quarter:

• 93.6% of houses sold for a profit, compared to 94.1% the previous quarter.
• 74.0% of apartments sold for a profit, compared to 77.0% the previous quarter.

Owners who had a positive sale result made a median $302,500 profit after holding the property for a median 8.8 years, while those who had a negative sale result made a $50,000 loss after holding the property for 2.4 years.

Market conditions more favourable for buyers than sellers

CoreLogic said it was important to note that the share of profitable resales was still quite high, even though it was significantly lower than the record result of 99.3% in the final quarter of 2021, at the peak of the last boom.

“For context, property values themselves are still 10-11% below the peak. In addition, the small rise in the share of property resales being made for a gross loss in the first three months of 2024 is pretty consistent with what has been happening across the market more generally,” according to CoreLogic. 

“That is, with affordability still stretched (and gross yields low), mortgage rates high and the rise in available listings on the market shifting pricing power towards buyers to some degree, we’ve seen property values flatten off since the end of 2023. In this buyer’s market, it’s no surprise that there have been some more loss-making resales in Q1 2024 (albeit still quite low).”

CoreLogic said people should remember two key points when reviewing these figures:

• Anyone who holds their property for the typical hold period of seven to eight years will almost inevitably make a gross profit, while those who sell quickly are more likely to experience a loss.
• Most owner-occupiers don't generate a windfall even when they sell for a significant profit, because they often recycle those funds into a new property.

“Looking ahead, we continue to expect an underwhelming upturn for sales volumes and house prices in 2024, as unaffordability pressures continue to play a role and mortgage rates generally stay high. In that environment, and with available listings on the market quite high, it’s better news for buyers and less positive for sellers,” CoreLogic said.

As CoreLogic noted, this is a buyer’s market, given that price growth is minimal and buyer competition is low. So this would be a good time for many of your clients to buy, depending on their financial circumstances. If you know anyone who’s planning to purchase a home or investment property, please refer them to me so I can help them finance the deal.