The Australian property market has reached a remarkable milestone, with profit-making sales hitting the highest rate since July 2010. According to the latest CoreLogic Pain and Gain Report, an astounding 94.3% of property sales in the first quarter of 2024 resulted in a profit. This surge in profitable transactions highlights the robust health of the real estate market and presents a golden opportunity for prospective buyers.
“An astounding 94.3% of property sales in the first quarter of 2024 resulted in a profit”
Current market insights
The CoreLogic report also sheds light on various market dynamics:
Houses vs. Units
Houses have proven to be a more profitable investment than units, with 97.1% of house resales making a gain compared to 89.0% of units. The median gain for houses was significantly higher at $320,000, compared to $172,500 for units.
Regional vs. Capital Cities
Regional markets outperformed capital cities, with 95.6% of regional property sales resulting in a profit, compared to 93.5% in capital cities. This trend highlights the growing appeal of regional areas, driven by lifestyle changes and remote working opportunities.
Short-Term Resales
The report noted a decline in loss-making sales for properties held for two to four years, indicating a strong market response to rising interest rates and housing values.
Property price growth forecast over the next 5-10 years
As the Australian property market continues its upward trajectory, long-term forecasts suggest significant growth across major cities in the next 5-10 years. Here's a detailed look at what to expect in key urban areas:
Sydney
Sydney is expected to see substantial growth, with median house prices projected to reach around $2 million by 2030. This growth is driven by strong population increases, a persistent housing shortage, and anticipated interest rate cuts. Sydney remains an attractive market for both investors and homebuyers due to its robust economy and high demand for housing according to Michael Yardney of Property Update
Melbourne
Melbourne's property market is forecasted to see median house prices rise to approximately $1.6 million by 2030. The city benefits from a strong economic base and a high demand for residential properties. The luxury segment is expected to outperform due to recovery from the pandemic and increasing demand for high-end properties according to Michael Yardney of Property Update.
Brisbane
Brisbane is set for robust growth, with median house prices predicted to rise to around $1.3 million for houses by 2030. The city's growth is supported by significant infrastructure projects and strong population growth. Brisbane was also recently named Australia’s happiest city and ranked number 21 worldwide by the 2024 Happy City Index. Brisbane's market is also buoyed by its relatively affordable prices compared to Sydney and Melbourne according to Michael Yardney of Property Update.
Perth
Perth is anticipated to continue with stable but slow property price growth, with median house prices expected to reach around $980,000 by 2030. The city’s market is supported by a strong resource sector and increased migration. Despite its historically slower growth, Perth’s affordability and economic opportunities make it an attractive destination for buyers according to Michael Yardney of Property Update.
Adelaide
Adelaide's property market is forecasted to perform well, with house prices potentially reaching around $1.1 million by 2030. The city’s steady economic growth and relatively low property prices contribute to its attractiveness. Adelaide also benefits from a high quality of life and a growing demand for housing according to Michael Yardney of Property Update.
A golden opportunity for homebuyers
The recent data from CoreLogic underscores the lucrative nature of investing in Australian real estate. The combined value of gains from property resales amounted to $28.5 billion in the March quarter alone, with the median gain per sale standing at $265,000. This level of profitability has not been seen in over a decade, making it an opportune moment for buyers to enter the market.
But the benefits of purchasing property extend far beyond financial gains. Here are some compelling reasons why buying a home is a wise decision:
1. Long-term financial security
Investing in property is one of the most reliable ways to build wealth over time. The value of homes has been steadily increasing and owning a property can provide significant returns on investment. In fact, properties held for 30 or more years attracted a median gain of $780,000, highlighting the long-term financial benefits of homeownership.
2. Stability and comfort
One of the most significant advantages of owning a home is the stability it offers. Unlike renting, where tenants can be asked to move out with little notice, owning a property provides a permanent place to live. This stability is particularly crucial for families who need a consistent and secure environment for their children.
3. Personal freedom
Homeownership allows individuals to make modifications and improvements to their property, tailoring it to their personal tastes and needs. This freedom is not typically available to renters, who must often seek permission for even minor changes.
4. Community and belonging
Owning a home often comes with a sense of community and belonging. Homeowners are more likely to establish roots in a neighbourhood, get to know their neighbours, and participate in local activities, creating a supportive and engaged community.
Now is not the time for FOMO
The current Australian property market presents an unparalleled opportunity for those looking to invest in real estate. Beyond the attractive financial returns, owning a property offers stability, personal freedom, and a sense of community. With the market showing strong signs of continued growth, now is an excellent time to consider buying a home.
Investing in property is not just about making a profit; it's about securing your future, providing a stable home for your family, and enjoying the many benefits that come with homeownership. When your ready to get your property journey started, reach out to our experienced team and we can run through numbers with you.