Top property locations for profit in Australia: Report reveals best performers for capital gain

People selling property in Hobart could be the most likely to make a profit, new research shows. Find out which council region in your city delivered the most reliable gains in 2019.

One way to spot a strong local housing market is to check how many properties are reselling at a profit, according to research house CoreLogic.

They just released the Pain and Gain report for the September quarter of 2019, revealing the top property hotspots around Australia for profit-making sales.

The findings showed almost nine in ten (87.4%) property resales nationwide over the September quarter sold for more than their previous sale price. While that’s up from the previous quarter, it is well below the peaks of 2017, when 92% of resales returned a gross profit and property prices were higher, CoreLogic said.

Sellers in Hobart were the most likely to experience capital gains though, with 98.1% of properties selling at a profit over the three months to September. In fact, in some Hobart council regions, 100% of property resales were profitable according to the report.

CoreLogic Head of Residential Research Eliza Owen said the city had experienced strong gains over the past five years, translating into “exceptionally strong” results for people selling houses and apartments.

Regional Victoria and regional Tasmania followed, with 96.6% and 96.4% of sales making a profit, respectively. In fact, regional markets thrived in general, outperforming the capital cities, with 88% of regional resales profitable compared to 87.1% of the state capitals.

The ‘pained’ areas where profits were more difficult to come by included Darwin, where only 51.7% of properties resold at a gross profit, followed by regional Western Australia (56.9%) and Perth (63.6%).

Nationally, house sellers were more likely to receive capital gains than people selling units, particularly in Brisbane and Canberra, where units were respectively 6.8 times and 6.7 times more likely to sell for a loss than houses.

Below we reveal which council regions in Australia’s capital cities had the highest proportion of profitable sales in the September quarter, 2019.

Top property hotspots for profitable sales in capital cities

These locations recorded the highest percentage of all sales out of all local government areas in Australia’s capital city regions, according to CoreLogic:

1. Brighton, Derwent Valley and Glenorchy in Hobart, plus Peppermint Grove in Perth and Macedon Ranges in Melbourne: 100% profit-making sales.
2. Moorabool, Melbourne: 98.9% profit-making sales.
3. Mosman, Sydney, plus Clarence in Hobart: 98.6% profit-making sales.
4. Melton, Melbourne: 98.3% profit-making sales.
5. Wyndham, Melbourne: 98.2% profit-making sales.

Check out a city-by-city breakdown below.

Greater Sydney region’s top profit hotspots

These were the top three council regions for resale profits in the Sydney area, ranked by the percentage of all sales that resulted in a profit:

1. Mosman: 98.6% of homes sold at a gross profit, $436,000 median profit.
2. Waverley: 96.3% of homes sold at a gross profit, $522,250 median profit.
3. Hunters Hill: 95.5% of homes sold at a gross profit, $780,000 median profit.

In the greater Sydney region, 90.2% of resales made capital gains over the September quarter, which was up from 89.1% in the June quarter, but down from 94.5% a year ago according to CoreLogic’s data.

The City of Sydney council itself had 89.7% of homes sold at a gross profit, and a median profit of $335,000.

The areas in Greater Sydney with the lowest proportion of profit-making resales – the ‘pain’ property locations – were Parramatta, Canterbury-Bankstown and Strathfield.

Greater Melbourne region’s top profit hotspots

These were the top three spots for resale profits in the Melbourne area, ranked by the percentage of all sales that were profitable:

1. Macedon Ranges: 100% of homes sold at a gross profit, $380,000 median profit.
2. Moorabool: 98.9% of homes sold at a gross profit, $219,500 median profit.
3. Melton: 98.3% of homes sold at a gross profit, $225,000 median profit.

In the greater Melbourne region, 93% of resales made capital gains over the September quarter, which was up from 92.2% in the June quarter, but down from 95.2% a year ago.

The City of Melbourne council had 67.1% of homes sold at a gross profit, making it the area with the lowest proportion of profit-making resales in Victoria’s capital. It was followed by Stonnington and Port Phillip.

Greater Brisbane region’s top profit hotspots

These were the top three spots for resale profits in the Brisbane area, ranked by percentage of profitable sales:

1. Scenic Rim: 93.6% of homes sold at a gross profit, $155,000 median profit.
2. Moreton Bay: 90.8% of homes sold at a gross profit, $125,000 median profit.
3. Redland: 90.4% of homes sold at a gross profit, $125,000 median profit.

In the greater Brisbane region, 87.9% of resales made capital gains over the September quarter, which was up from 87.2% in the June quarter, but down from 90.8% a year ago.

The Brisbane City Council – the largest local government area in Australia – had 86.1% of homes sold at a gross profit, making it one of the areas with the lowest proportion of profit-making resales. Lockyer Valley council recorded the lowest percentage of capital gains in the region.

Greater Adelaide region’s top profit hotspots

These were the top council areas for resale profits in the Adelaide region, ranked by the percentage of all sales that were profitable:

1. Adelaide Hills: 96.6% of homes sold at a gross profit, $130,000 median profit.
2. Mitcham: 94.3% of homes sold at a gross profit, $200,250 median profit.
3. Holdfast Bay: 93.8% of homes sold at a gross profit, $184,000 median profit.

In the greater Adelaide region, 89.2% of resales made capital gains over the September quarter, which was down from 91.8% in the June quarter.

The City of Adelaide had 70.2% of homes sold at a gross profit, making it the council with the lowest proportion of profit-making resales in the area. It was followed by Playford and Norwood Payneham St Peters.

Greater Perth region’s top profit hotspots

These were the top three spots for resale profits among Perth’s council regions, ranked by  percentage of sales that were profitable:

1. Peppermint Grove: 100% of homes sold at a gross profit, $185,750 median profit.
2. Claremont: 81.8% of homes sold at a gross profit, $232,500 median profit.
3. Cottesloe: 81.3% of homes sold at a gross profit, $445,000 median profit.

In the greater Perth region, 63.6% of resales made capital gains over the September quarter, which was up slightly from 63.3% in the June quarter, but down from 68.8% a year ago.

The City of Perth council area had 32.3% of homes sold at a gross profit, making it the area with the lowest proportion of profit-making resales. It was followed by Belmont and Mandurah.

Greater Hobart region’s top profit hotspots

These were the top three spots for resale profits in the Hobart council regions, which all tied for the highest percentage of sales (listed alphabetically):

1. Brighton: 100% of homes sold at a gross profit, $105,000 median profit.
2. Derwent Valley: 100% of homes sold at a gross profit, $121,183 median profit.
3. Glenorchy: 100% of homes sold at a gross profit, $150,000 median profit.

In the greater Hobart region, 98.1% of resales made capital gains over the September quarter.

The City of Hobart had 95.7% of homes sold at a gross profit, making it the council area with the lowest proportion of profit-making resales, but still considerably higher than all other state city centres.

Greater Darwin region’s top profit hotspots

These were the top three spots for resale profits in the Darwin council regions, ranked by the highest percentage of all sales:

• Litchfield: 65% of homes sold at a gross profit, $171,000 median profit.
• Palmerston: 53.1% of homes sold at a gross profit, $165,000 median profit.
• Darwin: 49.7% of homes sold at a gross profit, $120,000 median profit.

Note: Darwin only has three council regions.

In the greater Darwin region, 51.7% of resales made capital gains over the September quarter, which was up from 50.4% in the June quarter, but down from the time home values peaked in mid-2014 when around 95% of homes sold attracted a profit.

According to CoreLogic, the unit sector showed a larger proportion of loss-making resales in Darwin, with 61.8% of sales making a loss over the quarter, compared to 39% of house sales.

Canberra region’s top profit hotspots

The resale profits in the Canberra council region were as follows:

• Canberra: 89.3% of homes sold at a gross profit, $158,000 median profit.

In Canberra, 89.3% of resales made capital gains over the September quarter, which was down from the 90.4% of resales recorded a year ago. However, CoreLogic analysts said they expected a “high likelihood” this would trend higher over the short-to-medium term.

Houses in Canberra returned a greater percentage of profitable resales (96.9%) than units (78.9%).

While there is much more worth taking into consideration when considering the overall condition of a housing market, including house prices, auction clearance rates and what type of home loan you may be able to secure if you’re planning to buy, looking at profitable sales history could be one place to start.