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Profitability reaches 20-year-high across national market as values rise
New data has shown that the national residential housing market has hit its highest rate of profitability in more than two decades in the September quarter, following a year of rising home values.
New findings from Cotality have shown that profitability has surged during the September quarter, marking the strongest result in 20 years.
The Pain & Gain Report, which covered approximately 100,000 resales, showed that 95.5 per cent of sellers made a nominal profit, up from 94.9 per cent in the June quarter – the strongest result since July 2005.
During the quarter, the median nominal gain from resale reached $335,000, the largest resale gain on record, surpassing the previous high of $325,600 in the December 2021 quarter.
According to the report, the surge can be attributed to a revitalised housing market, with national home values reaching new highs leading up to the end of September.
The report found that houses outperformed units in profitability, with 97.9 per cent of house resales turning a profit, compared to 90.6 per cent for units.
While units accounted for only a third of resale activity, they made up 68.9 per cent of all loss-making sales.
Regional markets were also found to be more profitable than major cities, with a 97.3 per cent profit margin, compared to the combined capitals at 94.4 per cent.
The report found that Brisbane led the capitals in profitability for the fourth consecutive quarter, with 99.8 per cent of resales making a nominal gain.
The River City also saw the highest median nominal gain of the capitals in the quarter, recording a profit of $444,000 across all houses and units.
The Somerset local government area (LGA) saw the most profitability at 100 per cent, followed by Ipswich at 99.9 per cent and Brisbane at 99.8 per cent.
Adelaide was a close second, with 99.3 per cent of sales returning a nominal gain on the previous quarter, also recording the second-highest median nominal gain of $407,500.
“Profitability across the Adelaide market continues to improve, due to a long history of steady performance and a more recent windfall of capital gain in the past five years,” Cotality said.
Several LGAs returned 100 per cent profitability, including Adelaide Plains, Gawler, Mitcham, Mount Barker, Playford, Prospect, and Walkerville.
Perth recorded the third-highest rate of profit-making sales with a 98.2 per cent profitability rate, returning a median profit of $355,450.
The most profitable suburbs were Bassendean, Cambridge, and Mosman Park, all at 100 per cent.
Canberra saw a jump in profit-making sales, recording 93.5 per cent, up from 93.1 per cent in the previous quarter, coinciding with a 1.5 per cent quarterly lift in home values.
“95.5 per cent of houses made a nominal gain, while 90.7% of units made a profit from resale,” Cotailty said.
Despite recording the highest rate of loss across the capital city markets at 17.2 per cent, Darwin was the most improved market for profits over the year to September, with the rate of loss-making sales falling nearly 14 percentage points.
The Palmerston region recorded the highest profit in the city, at 90.1 per cent.
Melbourne’s most profitable suburbs included Casey and Frankston at 98.6 per cent, with Cardinia following at 98.0 per cent.
In Sydney, the areas with the highest rates of profit-making sales were Wollondilly at 99.5 per cent, Campbelltown at 98.5 per cent and Mosman at 98.4 per cent.
In Hobart, the Hobart LGA recorded the highest profitability in the city at 95.8 per cent, followed by Derwent Valley at 94.9 per cent and Brighton at 94.6 per cent.
Cotality’s head of research, Eliza Owen, said increased profitability was largely correlated with rising market values throughout the year, fuelled by improved credit conditions following rate cuts.
"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,” she said.
Owen said that the recent rise in profitability showed greater stability was returning to the market, but there was less certainty heading into 2026 due to the building risk of a cash rate increase.
"Weakening market conditions, as seen by the capital city clearance rate dipping below 60 per cent at the end of 2025, often coincide with slowing rates of profitability,” she said.
“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,” she concluded.