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Head of research Eliza Owen. Source: CoreLogic
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  • Owner-occupiers are cashing in on the highest level of profitability in a decade, with investors trailing behind, according to a CoreLogic report
  • In the June 2021 quarter, 93.9 per cent of owner-occupied resales generated a nominal profit, compared to 87.7 per cent of investor resales
  • The median nominal gain on resales for owner-occupiers was $295,000, compared to $200,000 for investors
  • CoreLogic’s Eliza Owen says the market’s recent exceptional increase allowed homeowners flipping after only two years to earn a median return of $123,000

Owner-occupiers are cashing in on the highest level of profitability in a decade, with investors trailing behind.

According to CoreLogic’s Pain & Gain Report, 91.5 per cent of resales during the June quarter showed a modest profit-making gain from the prior purchase price, the greatest level of profitability in nearly a decade.

The report’s author, CoreLogic head of research Eliza Owen said profit-making residential property sales had grown for four quarters throughout the country.

The study examines the proportion of house resales that resulted in nominal profits or losses for sellers. It is based on about 106,000 dwelling resales in the June quarter – a nine per cent rise from the March 2021 quarter.

In the June 2021 quarter, 93.9 per cent of owner-occupied resales generated a nominal profit, compared to 87.7 per cent of investor resales.

Despite accounting for 28 per cent of all resales in the quarter, investor sales accounted for just 26.6 per cent of profit-making resales and 44.1 per cent of loss-making resales in the June quarter.

Ms Owen stated that the market’s recent increase allowed homeowners flipping after only two years to earn a median return of $123,000.

“For those cashing in after over 30 years of holding a property, the median return was $712,000,” she said. 

“Such high levels of profitability may start to encourage vendor participation and bring down typical hold periods, especially as major cities navigate a path out of 2021 lockdowns.”

Profitability rose in both the house and unit markets during the June 2021 quarter, while the rate of loss-making resales remained greater in the unit sector.

According to CoreLogic, investors experienced a higher incidence of loss-making resales (12.3 per cent) than owner-occupiers (6.1 per cent) due to the subdued performance across unit markets.

A persisting pattern in 2021, profitability levels were highest in regional and tree-change markets.

Ms Owen stated that such record-high rates of profitability extended throughout regional Victoria’s whole housing market, with 98.7 per cent of resales selling for more than the original price.

In fact, regional Victoria had the greatest percentage of investment profitability in the June quarter, at 99.2 per cent.

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