07.13.2022 Suburb Spotlight

How Much Have You Made On Your Eastern Suburbs Property?

How Much Have You Made On Your Eastern Suburbs Property?

We know that Sydney’s property market has grown exponentially since 2020.

But do you know how much you’ve made on your property in the time that you’ve owned it?

After a one-in-a-30-year real estate boom, many property owners are asking what they stand to have made on their own property.

How much profit are Sydney vendors making on their properties?

The latest data from CoreLogic reveals that in the March quarter, the median gains made on the sale of a house in Sydney were $606,500. This was the highest of all the house markets in the country. Sydney unit resales, meanwhile, generated a median nominal gain of $260,000, second only to Hobart. To put those figures into context, the median gain from all profitable property sales across the country was $290,000 in the March quarter.

But what about the slowing market?

After the 2020/21 property boom, the heat has now come out of the real estate market, and we’ve seen the return of more balanced conditions. So what does that mean for the gains property owners stand to make on their real estate?

Most Sydney property owners continue to make a profit when they sell. CoreLogic’s research shows that 95.2% of Sydney real estate resales in the March quarter made a nominal gain, with only 4.8% generating a loss. When you split that out into houses and units, you find that 98.9% of Sydney house sales were profitable, while the same could be said of 92.1% of unit sales.

This is because the slight softening of prices we’ve seen in 2022 hasn’t come close to undoing the significant price gains made between September 2020 and May 2022 (which were a hefty 27.7%, according to CoreLogic). Property owners who purchased before the upsurge are still more than likely to make a profit.

Is it different for investors and owner-occupiers?

CoreLogic figures from the March 2022 quarter show that across Australia, 96.6% of owner occupier resales generated a profit, while for investor resales, the percentage was 90.7%. Here in Sydney, 97.3% of owner occupier sales were profitable, compared to 92.9% of investor sales. While the national difference between hold periods was minimal (9.1 years for owner occupiers compared to 8.8 years for investors), a higher proportion of investment resales were units (55.5% for investors compared to 16.3% for owner occupiers).

With units more prone to make a loss, especially in high investment markets like inner Melbourne and Brisbane, this accounts for the difference in the number of gain-making sales between owner occupiers and investors. As the numbers below show, blue-chip areas with an abundance of quality house and unit stock, like the eastern suburbs, are less likely to experience loss-making sales.

What kind of gains are eastern suburbs’ property owners making?

The CoreLogic data shows that the overwhelming majority of property sales in the eastern suburbs in the March quarter generated a profit. Each of the LGAs in our area outperformed the Sydney-wide benchmark of 95.2% profitable sales.

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In the Randwick LGA (which includes suburbs such as Centennial Park, Clovelly, Coogee, South Coogee and Randwick), 98.9% of property sales in the March quarter generated a profit. The median profit was $482,500, with a median hold period of 9.4 years for profit-making sales.

Gains-making property sales in the Waverley LGA (home to suburbs including Bondi, Bronte, Dover Heights, North Bondi, Queens Park, Tamarama, Waverley and part of Rose Bay and Vaucluse) generated a median profit of $500,000 in the March quarter. The median hold period in the Waverley LGA for profit-making sales was 9.8 years, and 97.9% of all sales were profitable.

Meanwhile, in the Woollahra LGA (encompassing Bellevue Hill, Darling Point, Double Bay, Edgecliff, Point Piper, Watsons Bay, Woollahra and part of Paddington, Rose Bay and Vaucluse), 97.4% of all sales in the March quarter generated a capital gain for their vendors. The median profit was $472,500, with a median hold period of 8.4 years for profitable sales.

What kind of gains are being made over a five-year hold period?

Figures from realestate.com.au show the compound growth rates for houses and units in our eastern suburbs based on the last five years’ sales. Some of the results are truly jaw-dropping.

Suburb Compound growth rate based on five years of sales – houses Compound growth rate based on five years of sales – units
Bellevue Hill 23.8% 7.5%
Bondi 28.7% 17.0%
Bondi Junction 11.8% 9.2%
Bronte 20.0% 18.7%
Centennial Park Unavailable 2.3%
Clovelly 32.9% 38.0%
Coogee 15.6% 11.5%
Darling Point 8.0% 51.9%
Double Bay 10.6% 14.3%
Dover Heights 33.6% -33.9%
Edgecliff 21.0% 28.9%
North Bondi 24.1% 9.3%
Paddington 16.4% 7.8%
Point Piper Unavailable 21.4%
Potts Point Unavailable -0.3%
Queens Park 33.5% 17.4%
Randwick 20.7% 12.2%
Rose Bay 27.5% 9.0%
South Coogee 27.7% 27.5%
Tamarama Unavailable 28.9%
Vaucluse 38.8% 24.1%
Watsons Bay 44.4% Unavailable
Waverley 2.1% 10.9%
Woollahra 34.4% 22.8%

Source: realestate.com.au/australia

Of course, owners who have held onto their property for longer than five years may well stand to make even greater gains when it comes time to sell. CoreLogic reports that in the March quarter, resales of Australian properties held for 30 years or more made median gains of $781,750.

If you’re thinking of buying or selling here in Sydney’s east, get in touch today.