Most sellers pen gains as rising values bolster equity buffers for borrowers
Australian home owners recorded their strongest resale profits in more than 20 years in the September 2025 quarter, according to property data and analytics provider Cotality.
The firm’s latest Pain & Gain report, based on around 100,000 residential resales, found that 95.5% of vendors achieved a nominal gain, up from 94.9% in the June quarter and the highest share since July 2005.
The improvement coincided with a sustained lift in housing values. National dwelling prices set new peaks for eight straight months to the end of September 2025, helping push the median gross profit on resale to a record $335,000, eclipsing the previous high of $325,600 set in the December 2021 quarter.
“The increase in profitability was strongly correlated with rising market values throughout 2025, driven partly by improved credit conditions after cash rate cuts earlier in the year,” said Eliza Owen (pictured right), head of research at Cotality.
“In 2026, the path for profitability is less certain because of the changed outlook for interest rates, which will be an issue for recent home buyers in particular.”
Melbourne remains a laggard
The report identified several trends relevant for lenders and brokers. The median nominal resale gain of $335,000 was the largest gross profit on record, and remained the peak even after adjusting for inflation.
In Melbourne, loss-making unit resales declined by 13.5% over the quarter, or about 200 fewer loss events, indicating some recovery in that segment. However, Melbourne still accounted for the largest national share of loss-making unit sales at 29.1%, underscoring ongoing risk for some apartment borrowers.
Detached houses continued to outperform units. About 97.9% of house resales were profitable, compared with 90.6% of unit resales. Units represented only around one-third of resale activity, yet they made up 68.9% of all loss-making transactions. This gap in performance between houses and units remains an important consideration for portfolio risk and serviceability assessments.
Brisbane soars
Brisbane remained the most profitable capital city market for the fourth consecutive quarter.
In the September 2025 quarter, 99.8% of resales in Brisbane achieved a nominal gain, a new high for the series. The city also recorded the highest median nominal gain among the capitals, at $444,000 across both houses and units.
Regional Australia again delivered a higher rate of profit-making resales than the combined capitals, with 97.3% of transactions in the black compared with 94.4% in the capital city markets, extending a trend that has been in place for more than five years.
Despite this stronger likelihood of a profitable outcome in regional areas, the typical dollar return was lower. The median nominal gain in regional Australia was $290,000 in the quarter, compared with $370,000 across the combined capital cities.
Source: Cotality
Darwin had the highest proportion of loss-making sales at 17.2%. However, it was also the most improved capital over the year to September, with its loss-making rate falling by almost 14 percentage points. Melbourne held the second-highest share of loss-making resales among the capitals, at 9.3% in the September quarter, although this was down from 10.6% in the June quarter and 11.3% in March 2025.
Sydney followed with a 7.5% loss-making rate but continued to lead nominal gains for houses, with a median gross profit of $675,000. Hobart experienced the largest annual rise in loss-making resales, with the rate increasing to 5.7% from 5.1% a year earlier. In Canberra, 93.5% of resales were profitable, up from 93.1% in the June quarter, in line with a 1.5% quarterly increase in home values.
Hold periods increase
The report also examined holding periods and their relationship with profitability. The median hold period across all resales rose to nine years in the September quarter. Properties sold at a loss had a shorter median hold of 8.2 years, indicating that shorter ownership periods carry higher downside risk in a changing rate environment.
Owen said the recent upswing in profitability suggested a more stable backdrop than during earlier phases of the cycle, but she noted that short-term sellers remain exposed to market shifts. “Short selling times can increase the risk of making a loss, but the recent rise in profitability across most regions suggests a greater level of stability is returning to the market,” she said.
New year could bring resale pressure
Looking into 2026, Owen cautioned that any renewed increase in the cash rate, following signs of re-accelerating inflation, could put pressure on resale results.
“Weakening market conditions, as seen by the capital city clearance rate dipping below 60% at the end of 2025, often coincide with slowing rates of profitability,” she pointed out. “We are now seeing some higher-value segments in Sydney already moving into decline, which could test the resilience of profitability for short-term sellers in the year ahead.”
For brokers and lenders, the data points to solid equity positions for many existing borrowers but a more uncertain environment for recent purchasers, particularly in higher-value and unit-heavy markets, if borrowing costs rise again.
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