Where home sellers made million-dollar profits

New data from PropTrack has revealed the suburbs across the country where home sellers have made million-dollar profits since interest rates began to rise.

With interest rates rising steadily since May, the REA Group’s PropTrack research has found that while property prices have started falling, some homeowners who sold their properties when prices were still near their peak have made hefty profits.

There are 10 suburbs in greater Sydney and greater Melbourne where sellers made the biggest median profit. This information is based on the difference between the original purchase price and the most recent sale price for homes sold between March and July.

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PropTrack senior economist Paul Ryan (pictured above) said the suburbs where sellers made the biggest profits in this period were Seaforth and Double Bay (both NSW) and Sorrento in Victoria.

“Properties that sold in these locations during this time period achieved a median profit of $1,540,000, $1,495,000 and $1,407,500 [respectively],” Ryan said. “We looked at sellers who sold their homes during this period as interest rates started to increase, along with looking at the profit to losses sellers made and how long they held their property for.”

Ryan said the narrative during the past two-and-a-half years was that people who had decided to make sea or tree changes were starting to return to the cities as they reopened, while the honeymoon period for lifestyle changes was cooling down.

“Two factors that everyone is aware of are properties have drastically increased in price and home sellers in these areas have held onto their properties longer,” he said. “It is speculation; however, I believe a lot of these sellers realised how much talk there is about the housing market and have compared their own home to nearby sales. They have realised how much newfound equity they have, so might have bought forward their plans and decided to sell, which is a key factor amongst recent sellers.”

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Ryan said it was likely this trend would continue.

“We have seen strong listing activity so far this year and off the back of the equity growth, property prices have started to fall in most regions across the country. Despite prices going a bit backwards, equity in homes is so good, it will continue to drive the housing market,” he said. “Refinancing activity has been very strong, whether that is for another investment, renovation, etc, but it is on people’s minds and it is great to see so many in better financial positions to take advantage of this.”

Ryan said property prices had started to turn and the correction stemmed back to interest rates.

“Property prices are still up 35% from the start of the pandemic, so it would take massive falls to get back to where we were 2.5 years ago,” he said. “Anyone who is in the market already is in a good position and we are seeing that through realestate.com.au listings and profits for sellers.”

The top 10 suburbs where property sellers made the biggest median profit nationally between March and July are: