The Australian property market may be booming, but not everyone is cashing in. As home values soar, some sellers are finding themselves facing losses instead of profits. A new report has revealed the suburbs where homeowners are losing money, with one area in Melbourne showing an average loss of $55,000 per sale. If you’re planning to sell your property soon.
Profits vs. Losses: The Current Property Landscape
Despite the high percentage of profitable property sales, there are still significant losses in certain areas. According to Cotality’s latest Pain & Gain report, 95.5% of property sales in the September quarter were profitable, with the average profit at a staggering $335,000 per sale. This increase is attributed to rising property values, which have been partly driven by recent interest rate cuts from the Reserve Bank of Australia (RBA).
However, the outlook for 2026 is less certain. As interest rates are expected to rise again, the path for profitability could become less clear. Eliza Owen, Cotality’s head of research, warns that weaker market conditions are already evident, particularly in high-value segments in Sydney. A declining capital city clearance rate (below 60% at the end of 2025) could signal a slowdown, making it harder for sellers to achieve the same levels of profit seen in the past year.
Units vs. Houses: The Big Profit Divide
When it comes to profitability, houses continue to outperform units. Of all the house resales, 97.9% turned a profit, compared to just 90.6% for units, explains Yahoo Finance. However, units accounted for nearly 70% of all losses, despite making up only a third of the total resales. It seems the unit market is still struggling to regain momentum, with many buyers preferring houses due to space and location factors.
Brisbane stands out as the most profitable market, with nearly 100% of sales making a gain. The average profit in Brisbane is an impressive $444,000, a sign that the city is still thriving. Interestingly, regional Australia has also outperformed the capitals, with 97.3% of sales making a profit compared to 94.4% in the capital cities.
The Melbourne Struggle: A $55,000 Loss on Average
While the majority of property sales in Australia are profitable, some areas are seeing a sharp contrast. Melbourne, for instance, has been hit hard, with 45.5% of sales in the local government area resulting in a loss. On average, sellers in Melbourne are losing about $55,000 per property. This is despite an average holding period of 10.9 years. The struggling unit market in Melbourne is likely contributing to this decline, though there are signs of improvement as the market gradually recovers.
This doesn’t mean Melbourne is out of the game, though. Some suburbs are still holding strong, but it’s clear that buyers are becoming more selective, particularly in areas with lower demand or oversupply. Sellers in these areas may need to adjust their expectations and consider holding off on selling until market conditions improve.
What’s Next for Sellers?
For those planning to sell, it’s important to understand where the market is headed. While the majority of sales are still profitable, certain areas are showing signs of strain. Sellers in high-density areas, particularly in Melbourne and Sydney, may need to reassess their pricing strategies and market conditions before listing their homes. And with interest rates expected to rise, the next year could bring more challenges for homeowners looking to make a profit.
If you’re thinking of selling, it might be worth doing some research into your specific area and consulting a real estate professional who can help you navigate the changing landscape. Market conditions can shift quickly, so staying informed will give you the best chance of getting the price you want.
