Suburbs where sellers making biggest profits

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Property prices have started falling as interest rates rise, but some homeowners who sold near the peak have made profits in the millions.

According to new data from PropTrack, despite interest rates beginning to rise in May, some people still made a massive profit on the sale of their homes.

The suburbs where sellers made the biggest profits from March to July this year were Seaforth in NSW, with a median profit of $1,540,000, followed by Double Bay in NSW, with a median profit of $1,495,000 and Sorrento in Victoria, with a median profit of $1,407,500.

“There was a bit of a narrative, or a bit of a contention, that maybe the kind of selling activity we’ve seen has been driven by people that moved during the pandemic to regional areas, or to southeast Queensland and northern NSW – all those lifestyle locations,” senior economist Paul Ryan told NCA NewsWire.

“The thinking was now the honeymoon period is over and cities have opened back up, and people are moving back, but the data really doesn’t support that.”

Mr Ryan said the profits which recent sellers had made were extremely high.

“That’s partly because housing price growth has been so strong over the past couple of years,” he said.

“The typical profit for sellers, among those that sold at a profit, was about $260,000, which is about twice the level we saw before the pandemic.

“But part of the reason why profits have been so strong is that, actually, recent sellers have held their properties in general for a bit longer than we usually see.

“So it’s really not the case that it’s recent sellers who have moved to these areas that have outperformed.

“It looks like it’s mostly that upgrade activity that’s been made possible by property price appreciation. That’s driving all of this selling activity.”

Even looking at locations across the country where price levels are lower, such as Perth and Hobart, people are getting solid profits.

“The median profit level is up in the kind of $300,000 to $400,000 mark, which goes to show how remarkable this housing price run up has been across the country,” Mr Ryan said.

“WA, particularly regional WA, has had such a depressed housing market for so long that the price growth that we saw over the past couple of years has kind of pushed people back up into profitable territory and opened up a lot of market activity.

“That’s kind of enabled people to be in the equity position to sell properties and move to different locations and upgrade.”

Mr Ryan said it would be interesting to see what happened if interest rates increased much further.

“A big part of the run up in prices that we saw in the past two years was the fall in interest rates, which boosted borrowing capacity quite significantly,” he said.

“Now that interest rates are going the other way and it’s contracting borrowing capacity, we’re seeing prices are now falling across the majority of the country.

“This data gives a really good context for where people are at in the property market because while prices are falling a little bit – and our forecast is that prices will fall roughly about two to five per cent this year nationally – many homeowners are in such a great equity position.

“These kinds of falls really don’t make much of a dent in that equity position of households, so there’s just so many people in such a good position.”

TOP SALES IN EACH STATE

  • NSW: Seaforth – median profit of $1,540,000;
  • Victoria: Sorrento – median profit of $1,407,500;
  • Queensland: Bardon – median profit of $830,000;
  • Western Australia: Floreat – median profit of $460,000;
  • South Australia: Fullarton – median profit of $521,500;
  • Tasmania: West Hobart – median profit of $543,500;
  • Northern Territory: Muirhead – median profit of $406,000; and
  • ACT: Crace – median profit of $879,500.

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