Login
The biggest losers: Areas where sellers have felt the most pain
New data has shown resale profits have plunged across multiple cities in the December quarter, as falling values offset the benefits of longer holding periods.
According to Cotality’s Pain and Gain report, the top five loss-making areas were concentrated in Melbourne, with Sydney and Darwin also making the list.
The losses came as nationwide profitability reached a 20-year high, with 95.9 per cent of Australian property resales making a profit last quarter, with a median profit of $365,000.
Meanwhile, Australia’s loss-making sales were at 4.1 per cent, achieving a median loss of -$45,000, highly concentrated in key unit markets.
According to Cotality’s head of research, Gerard Burg, the weaker performing markets tended to have shorter holding periods, with the median hold time for loss-making resales remaining at 8.2 years.
The median hold period for profitable resale was slightly longer in the December quarter, at 9.2 years, up from 9.1 years in September.
Burg said that while holding for an extended period of time meant property owners could glide through market volatility, dwellings held for a shorter period were often exposed to changing market cycles.
“They may be examples of forced sales, if they were purchased at the top (of the market), and were forced to sell for financial reasons, that can be the issue,” he told REB.
“So if you can stand to hold for a longer period of time, the likelihood of the profitable outcome increases.”
Here are the least profitable suburbs:
City of Melbourne
The City of Melbourne proved to be the least profitable area nationwide, with about 45.9 per cent of all resales suffering a loss, with a median of -$64,500.
Stonnington
Located in Melbourne’s inner south-eastern suburbs, a total of 25.5 per cent of the area’s resales resulted in a loss last quarter, returning a median of -$54,250.
Port Phillip
Investors also felt the pain in Port Phillip, south of Melbourne’s CBD, recording a 25.4 per cent loss and median of -$30,000.
According to Burg, losses in all three Melbourne areas were highly concentrated within the unit markets.
“When you take a look at the trend of the last few years, a relatively large increase in units across this area has really either capped or actually lowered the median value of units,” he said.
“It’s 2017 for the peak of values in Melbourne. Unit values in Melbourne have actually declined since 2017.
“When you’re looking over that period, you lose that benefit of holding for an extended period of time because you are selling for less than what you purchased it for at that time. That’s really the main driver there.”
Parramatta
The city of Parramatta, in Sydney’s west, also saw plenty of losses in the December quarter, returning a result of 23.9 per cent to record a median of -$53,000.
Darwin
The Northern Territory also made the list, with Darwin seeing 22.1 per cent of all resales achieving a loss, with the median being -$50,000.
Looking ahead for 2026, Burg said profitability was likely to be more of a challenge in light of two rate rises this year, with the possibility of more to come.
“Consumer sentiment generally has deteriorated quite significantly, particularly more recently following the conflict in the Middle East and the increase in energy prices that we’ve seen coming out of that.”
He said this meant overall weaker demand than in the last quarter, while on the supply side, conditions were starting to balance out in Sydney and Melbourne.
“The recent trends have been that in both of those cities, we’re looking at a market that’s a bit closer to the five-year average, whereas previously in the latter part of 2025, both markets were well below that.”
Burg said mid-tier capitals, particularly Perth, would continue to see strong demand due to tighter supply.
“Perth really stands out in terms of the lack of supply and that’s more likely to put a floor on home values in Perth than, in say, Sydney and Melbourne,” Burg concluded.