The $157m hit making Sydney and Melbourne listings harder to win

According to Cotality’s latest Pain & Gain report, Australia’s housing resale market has declined from its 21-year high, with 95.4 per cent of properties delivering a profit.

Similarly, the median gain fell to $371,000 from the record high of $378,000 in the March quarter.

Cotality head of research Gerard Burg said the results marked a modest change following years of strong performance driving equity growth for owners.

“Profitability is still exceptionally high by historical standards, but we are starting to see the impact of weaker housing market conditions flow through to resale outcomes,” Burg said.

“Most sellers are still benefiting from the significant value growth accumulated over the past five years, which is providing considerable protection against the early stages of the downturn.”

As values continued to decline, Burg said the buffer would become significantly more important in determining resale outcomes.

Uneven capital markets

According to the data, Melbourne recorded the lowest percentage of profit-making sales across the capitals, with just 89 per cent selling above purchase price and the 11 per cent of dwellings that sold below went for $43,000 below purchase price.

The data showed that the Victorian capitals’ total value of loss exceeded $93 million.

Similarly, profitability across Sydney’s property market sat below the national average, coming in at 92.7 per cent, with a median loss of $48,000.

Similar to Melbourne, Sydney’s total losses of more than $64 million accounted for more than a quarter of the national total.

By comparison, the smaller capital cities, bolstered by strong value growth in recent years, saw more widespread profits.

Brisbane retained its position as Australia’s most profitable capital, with 99.8 per cent of resales delivering a gain with sellers pocketing $525,000.

With just 0.2 per cent of sales failing to achieve a gain in the river city, Brisbane’s median loss was just $50,050.

The South Australian capital of Adelaide secured the second spot on the profitability list, with 98.9 per cent of homes selling above purchase price, with the median gain reaching a record high of $480,400.

Conversely, homes in Adelaide ranked highest among the capitals for median loss, with sellers losing an average of $100,000.

Perth followed closely behind, with 98.8 per cent of home sales achieving a gain and a median profit of $470,000, with a median loss of $95,000.

Burg said the results of the Australia-wide property downturn had placed greater pressure on buyers and marked the beginning of a more challenging period for the market.

He said affordability and serviceability had already constrained buyers in the first half of 2026, with weaker consumer sentiment adding further pressure to housing demand.

“There is significant uncertainty around the short-term economic outlook, particularly the direction of interest rates and increasing pressure on household budgets.”

“If housing values continue to fall, we would expect that to place further downward pressure on resale profitability over the coming quarters,” Burg said.

Units continue to underperform

With 90.5 per cent of unit resales seeing a profit, the assets were significantly below their house counterparts, where 97.8 per cent achieved a gain.

Burg said the unit market results reflected the much stronger capital growth recorded by houses over the decade.

“The national median house was 36.5 per cent more expensive than the median unit in June, compared with a premium of 21.2 per cent five years ago, which gives some indication of how far the two sectors have deviated,” he said.

Burg said that units in Sydney and Melbourne accounted for more than 80 per cent of the value of unit resale losses nationally.

In Melbourne, more than one in five unit sales recorded a loss, while Sydney saw 11.4 per cent sell for below their previous purchase price.

“Unit losses are also highly concentrated. Most apartment owners are still selling for a profit, but the risk of a loss is considerably higher in parts of Sydney and Melbourne where value growth has been weaker.”

Time is the greatest determinant of value

Burg said holding a property for a lengthy period would better protect against short-term fluctuations in value.

The data found that sales that achieved a profit were held for a median of 9.1 years, compared to 8.1 years for losses.

He said the difference was most prominent in the housing market, where loss-making resales were held for an average of 4.4 years, compared to 9.3 for those that achieved a profit.

“Owners who have held their property for nine or 10 years have generally experienced several periods of value growth, giving them a larger equity buffer when market conditions weaken,” he said.

“Recent buyers have had much less time to accumulate those gains and are therefore more exposed when values fall, particularly if they bought close to the market peak.”

While longer hold periods would provide greater protection from value declines, Burg said they did not guarantee a profitable sale.

“The results vary considerably by market and property type, but the likelihood of a profitable resale generally increases with time.”