Record property profits see home owner wealth surge despite rising interest rates

Australian home owners now have the protection of a "financial shield" in uncertain times, as property resales achieve record profits, according to Domain.

Rising prices have created a surge in housing equity, which provides a "buffer against rising interest rates and inflation" for existing owners, a report from the real estate firm has found.

As many mortgage borrowers face higher home loan rates after the Reserve Bank's second rate hike in as many months, being able to resell property at a profit could provide some financial relief, but also entrenches the gap between home owners and those locked out of the market.

And recent buyers who bought as home values were hitting fresh records are less likely to be sitting on significant equity, particularly those who used low-deposit schemes.

For the first time in 15 years, more than 90 per cent of house resales in every Australian capital city turned a profit, Domain said.

Unsurprisingly, the boost to the wealth of existing property owners has also created a  greater barrier for those wanting to enter the market for the first time, its Profit and Loss report noted.

"The extraordinary capital growth in Australia's property market is moving into home owners' pockets at unprecedented levels as more households turn a profit," Domain chief economist Nicola Powell said.

"As home owners stay put for longer, they are seeing their equity build up over multiple price cycles. 

Dr Powell said the size of the profits was widening the gap between existing owners and prospective buyers, "making it increasingly difficult for younger Australians to buy property without the support of intergenerational wealth".

The report found 97.5 per cent of house resales and 88.3 per cent of home unit resales across Australia saw a profit in the second half of 2025.

99.5% of Brisbane, Perth houses resell for a profit

Sydney had the record median profit for houses of $750,000 after it saw an annual increase of 11.1 per cent.

However, Brisbane and Perth recorded the highest proportion of profit-making house resales at 99.5 per cent, compared to Sydney's 97.9 per cent.

Adelaide came in third at 98.2 per cent profit-taking with house sellers 15.5 per cent better off, dollar-wise, than 12 months earlier.

The profit and loss figures were based on resales that occurred in the second half last year, using properties with matched purchase and resale data.

The once underperforming Brisbane was also a stand-out in apartment sales with an Australia-best 99.1 per cent of home units offloaded earning a gain, followed by Perth (96.8 per cent) and Adelaide (96.6 per cent).

The softest markets, Domain found, were Melbourne, Darwin, Canberra and Hobart.

While Melbourne saw 95.9 per cent of houses sold deliver a median profit of $390,000, only 75.4 per cent of units transacted came out in positive territory with a median earning of $122,000, down 2.4 per cent.

Darwin's houses remained in demand (94.9 per cent profit earning), but just 72 per cent of units sold for a higher price than what the previous owner had paid, with median earnings of just $78,500.

Canberra saw 93.1 per cent of houses sold for a median profit of $370,000. But its home unit numbers were less lucrative, with a 7.8 per cent drop in profitability, meaning that 87.4 per cent of sellers made money.

Hobart's resale rate for both houses and units hovered around 95 per cent, but saw modest increases in the annual change in profit for both.

"Melbourne, Canberra, Hobart and Darwin recorded lower — though still elevated — profit shares relative to Brisbane and Perth [for units]," the Domain report said.

Regional Australia almost matches capital cities

While house profits in regional Australia were slightly behind city areas, home units fared considerably better, with a gap of almost one-tenth (95.8 per cent in the regions compared to 86.2 per cent in the cities) of unit sales producing a profit.

Those outside of the capitals pocketed a median profit of $260,000 when selling a unit compared to $215,000 in the "big smoke", with regional Queensland and regional NSW the most sought-after markets.

"Population inflows, lifestyle demand and constrained supply have supported steady price appreciation, translating into significant realised gains for [regional] sellers."

$2m-plus profits in blue ribbon Sydney suburbs

Sydney remained the city with the most eye-watering median profits when it came to house sales, with the Eastern Suburbs and Northern Beaches leading the way, Domain found.

Eastern Suburbs-North, which includes the suburbs of Paddington, Woollahra, Vaucluse and Bondi, had a median house profit of $2.77 million, followed by Manly at $2.32 million and Chatswood/Lane Cove at $2.035 million.

On the west coast, the combined Perth suburbs of Cottesloe-Claremont attracted the highest median profit outside of Sydney at $1.4 million, in an indicator of the West Australian capital's resurgence.

Brisbane Inner — including the affluent suburbs like New Farm, Toowong and East Brisbane — also made lucrative gains, as house sellers pocketed a median amount of $1.157m.

Even so, Domain said that suburbs that were once considered average or run-of-the-mill were now overachieving.

"Profitability is not confined to prestige areas," the Domain report said.

Barrier to entry defined by existing family wealth

St Marys, in Sydney's far west, boasted a 100 per cent success rate in resale house profitability, while Campbelltown and Sutherland both scored above 99 per cent.

Melbourne's Frankston (98.7 per cent), Knox (98.1 per cent) and Dandenong (98.1 per cent) topped the percentage of profitable sales for the Victorian capital.

A downside of the spreading profitability for would-be buyers is that suburbs once considered entry points for first-home buyers are moving out of reach.

"The sheer size of these profits is creating a wider gap between established owners and those attempting to enter the market, making it increasingly difficult for younger Australians to buy property without the support of intergenerational wealth," Dr Powell said.

Some regional locations made both lists, the biggest median profit and largest median loss, highlighting that while real estate often pays off, it is not always a sure thing.

While the Tweed Valley in NSW had the state's third largest house median profit at $630,000, it also topped the charts for the worst median loss at $312,500. Similarly, the Queensland resort town of Noosa had a $910,00 median house profit, but also a median loss of $150,000 when sellers came up short.

"The largest resale losses are concentrated in areas that experienced strong price growth in earlier years," the report said.

"These figures often reflect small numbers of transactions and individual purchase timing. Importantly, the majority of properties within these areas are still reselling at a profit.