Property prices have started to fall as interest rates rise, but some homeowners who sold near the peak have made millions of dollars in profits.
Even though interest rates started rising in May, some people were still making huge profits selling their homes, according to new PropTrack data.
The suburbs where sellers made the biggest profit from March to July this year were Seafort, NSW with a median profit of $1,540,000, followed by Double Bay, NSW, with a median profit of $1,495,000, Victoria. State Sorrento had a median profit of $1,407,500. .
“A little story or a little bit of controversy that the kind of sales activity we saw could have been driven by people who moved to rural areas, or southeast Queensland and north NSW during the pandemic. There was a place for those lifestyles,” senior economist Paul Ryan told NCA NewsWire.
“It was thought that the honeymoon period was over, cities were reopening and people were returning, but the data don’t support that.”
Mr Ryan said the profits made by recent sellers are very high.
“This is partly because house price growth has been very strong over the past few years,” he said.
“A typical profit for a profitable seller is about $260,000, which is about double pre-pandemic levels.
“But part of the reason the profits have been so strong is that sellers these days generally hold properties a little longer than we typically see.
“So it’s not that recent sellers who moved into these areas have outperformed.
“It seems to be mainly that upgrade activity that has been enabled by rising real estate prices. That’s driving all this sales activity.”
Even looking at places across the country with lower prices, like Perth and Hobart, people are getting solid profits.
“Median profit levels are up about $300,000 to $400,000, which shows how remarkable this home price rise is nationally,” Ryan said.
“Washington, especially rural Washington, has had a sluggish housing market for such a long time that the price increases we’ve seen in the last few years have pushed people back into more profitable territory, resulting in a lot of market activity. opened.
“This put people on a fair footing to sell their property and move elsewhere to upgrade.”
Ryan said it would be interesting to see what happens if rates rise further.
“Most of the price increases we’ve seen over the last two years have come from lower interest rates, which have significantly improved borrowing capacity,” he said.
“At a time when interest rates are going in the opposite direction and borrowing capacity is shrinking, we are seeing prices falling across much of the country.
“This data gives us very good context on where people are in the real estate market because prices are down a bit — and our forecast is that prices will be around Expected to drop 2-5% – many homeowners have large equity positions.
“This kind of decline doesn’t have much impact on the equity position of households, which is why so many people are in such good positions.”
Top sales by state
- NSW: Seaforth – Median profit of $1,540,000.
- Victoria: Sorrento – Median profit of $1,407,500.
- Queensland: Bardon – Median profit of $830,000.
- Western Australia: Floreat – Median profit of $460,000.
- South Australia: Fullerton – Median profit of $521,500.
- Tasmania: West Hobart – Median profit of $543,500.
- Northern Territory: Muirhead – Median profit of $406,000.When
- ACT: Crace – Median profit is $879,500.
Suburbs where sellers make the most profit
Source link Suburbs where sellers make the most profit