In the most recent quarter, the Perth metro area saw an impressive nearly 99 percent of houses being sold for a profit. The report from Cotality’s Pain and Gain indicates that every property in Cottesloe and East Fremantle generated a monetary gain, highlighting the robust real estate market in those areas. Among homeowners who sold for a profit, the median nominal gain reached $324,000, with profits averaging a remarkable $694,750 in Cottesloe and $440,000 in East Fremantle. This trend underscores the significant return on investment for homeowners in these sought-after suburbs.
The report also suggests that the typical duration homeowners held onto their properties before selling, especially those who realized a profit, was approximately nine years. However, a small percentage of the sellers faced losses, predominantly in the Perth local council area. Here, 13.3 percent of sales resulted in an average loss of $40,000. Interestingly, these properties were held for around 12 years, indicating that longer holding periods did not guarantee profitability in this segment of the market.
Perth’s considerable success in the property market is further emphasized by its position as the third-highest rate of profit-making sales in Australia. The report credits this unprecedented turnaround to a staggering 80 percent increase in home values over the past five years, marking a significant recovery from a low of 56.1 percent of profitable sales recorded during the June 2020 quarter. This growth reflects the resilience of the Perth housing market, which appears to be gaining momentum.
Recent data indicates an optimistic outlook for the future of property sales in Perth, with profitability rates expected to remain elevated. The report mentioned recent rate cuts which are projected to further stimulate capital growth, showing an increase of 3.1 percent in the three months leading up to August. Such trends are encouraging for both current homeowners and potential buyers, proving that the market is on an upward trajectory.
This environment of rising home values and significant profits for sellers stands in stark contrast to other areas where homeowners may not be experiencing similar successes. The anecdotal evidence of long holding periods before selling—coupled with the localized losses—suggests a diverse landscape where not all regions are benefiting equally from the real estate upturn.
In conclusion, the remarkable performance of the Perth property market, characterized by a high percentage of profit-making sales and substantial gains, reflects a healthy economic environment. As the market continues to evolve, particularly in light of favorable economic conditions and policy changes, it’s anticipated that the current wave of profitability will persist, benefiting both sellers and the broader community in the long run.
