Home Insights The property sellers winning big in 2022 so far – including $1m profits

The property sellers winning big in 2022 so far – including $1m profits

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Property sellers in 2022 are delighted to be able to list their properties without lockdown disruption, and listing activity remains brisk throughout the year.

Following the extraordinary price gains of the past two years, recent sellers are making higher profits than recently seen and are unlikely to fall below their purchase prices.

Read our analysis on how long sellers have been holding properties these days and how many are making big profits despite the overall market cooling.

Sellers in recent months have become much less likely to sell properties at a loss.

The rate of recent sales that led to capital losses is one-third the rate seen in the pre-pandemic two years and half the rate seen in the Covid two years.

Given the extraordinary price increases across Australia over the past two years, this is not surprising. in 2021 The third fastest episode of price increases in history.

The data shows where vendors are still winning and where they are not.Photo: Getty

Compared to pre-pandemic 2018 and 2019, home prices have fallen across the country following regulatory action to improve lending standards and limit investors and interest-only lending.

These losses are therefore unlikely to represent a typical real estate experience.

Units are more likely to be sold at a loss.

This is likely not due to the shorter tenure of the units in recent sales, but rather because the price appreciation for units during the pandemic was much lower than for homes.

This is part of a broader shift in preference to larger homes and lifestyle locations since the outbreak of the pandemic. Previously, housing and unit price performance were very similar.

Recent sellers have also held properties for unusually long periods of time. There was no rush to sell properties purchased during the pandemic (purchased 1-2 years ago), and sales of properties purchased just before the pandemic (held for 3-4 years) were in line with the normal less than

This is partly because relatively few properties changed owners in the pre-pandemic market downturn.

Recent sales have overstated 6- to 8-year holdings. Many of these sales were made possible by strong equity gains over the past two years, providing deposits for upgrades.

A combination of strong price appreciation and long holding periods means that sellers have posted significant gains on recent property sales.

A typical profit for a seller is $260,000, double the level sellers achieved before the pandemic. In contrast, typical losses by sellers have changed little over time.

North Sydney sellers, especially Northern Beaches, have seen their biggest gains in the last five months. Pittwater and Manly’s interim profit on all sales surprisingly exceeded $1 million.

Byron Bay sellers in the Richmond Valley and Sunshine Coast have also recently sold for significant profits, with half of the sellers making more than two-thirds of the $1 million purchase price.

An interesting feature of this data is that sellers seem to prefer to hold on to properties rather than accept a price lower than what they paid.

If you look at the full distribution of profits from real estate, you’ll see that more profits are $0 than expected. This shows that the seller is trying hard to get back what you paid.

As prices continue to fall, the ability of homeowners to sell at a profit will be an important factor in deciding to upgrade or invest in their property in the coming period.

Earnings have been solid so far this year.Requires significant price reduction we are expecting Here we put a dent in these results for sellers this year.

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