Record Property Resale Profits Are Widening Australia's Housing Wealth Divide in 2026
Australia’s Property Market Is Minting Paper Millionaires
Something remarkable is happening in Australian property. For the first time in 15 years, more than 90% of house resales in every single capital city turned a profit. Nationally, the figure sits at 97.5%. In Brisbane and Perth, it’s 99.5%.
These are not marginal gains. The median profit on a house sold in a capital city is $530,000. In Sydney, sellers are walking away with a median windfall of $750,000. To put that into perspective, Brisbane’s entire median house price was only $515,184 back in March 2016. A decade later, sellers in Brisbane are banking $580,000 in profit alone.
The data comes from Domain’s Profit and Loss Report, published in March 2026, and it paints a picture of extraordinary housing wealth accumulation across the country. But beneath the record-breaking headlines lies a more uncomfortable truth: the very forces creating this wealth are making it increasingly impossible for younger Australians to buy their first home without help from their parents.
The Numbers: Profits by Capital City
The Domain report tracks every house and unit resale across Australia and calculates the gross profit or loss based on the difference between purchase and sale price.
House Resale Profits (H2 2025)
| City | % Profitable | Median Profit | Annual Change |
|---|---|---|---|
| Sydney | 97.9% | $750,000 | +11.1% |
| Melbourne | 95.9% | $390,000 | +1.6% |
| Brisbane | 99.5% | $580,000 | +22.9% |
| Adelaide | 98.2% | $539,500 | +15.5% |
| Perth | 99.5% | $528,000 | +25.7% |
| Canberra | 93.1% | $370,000 | +3.0% |
| Hobart | 94.3% | $330,000 | +4.8% |
| Darwin | 94.9% | $201,000 | +14.9% |
| National | 97.5% | $440,000 | +14.9% |
Source: Domain Profit and Loss Report, March 2026
Perth and Brisbane have surged to the top of the profitability ladder, overtaking Sydney and Melbourne for the share of sellers making money. This is the first time since the mining investment boom of 2011 to 2013 that the west has dominated this metric.
Unit Resale Profits (H2 2025)
Units are also delivering record profits, though the numbers are more modest:
| City | % Profitable | Median Profit |
|---|---|---|
| Sydney | 89.2% | $228,000 |
| Brisbane | 99.1% | $325,000 |
| Adelaide | 96.6% | $290,000 |
| Perth | 96.8% | $226,050 |
| Melbourne | 74.8% | $115,000 |
Brisbane has quietly overtaken Sydney to become the nation’s most profitable city for unit resales, with 99.1% of sellers collecting a gain and a median profit of $325,000.
Melbourne remains the weakest performer for units. Just 74.8% of unit resales turned a profit, reflecting years of oversupply in the inner-city apartment market and flat price growth.
What’s Driving These Record Profits?
Long Holding Periods Build Enormous Equity
The primary driver of record profits is time in the market. Australian homeowners are staying put for longer than ever, which means their properties have appreciated through multiple growth cycles.
Domain’s Dr Nicola Powell explained: “As homeowners stay put for longer, they are seeing their equity build up over multiple price cycles. This widespread profitability has given many Australians a strong financial safety net.”
The median holding period for a profitable house sale nationally is now over 10 years. At a compounding growth rate of 6% to 7% per annum (roughly the long-term average for Australian housing), a property doubles in value in about a decade.
Chronic Housing Undersupply
Australia’s housing supply crisis continues to underpin price growth. Building approvals remain stuck near decade-low levels, construction costs are elevated, and labour shortages persist in the building sector.
The National Housing Finance and Investment Corporation (NHFIC) has estimated that Australia needs to build 1.2 million new homes between 2024 and 2029 under the National Housing Accord. Actual completions are tracking well below that target.
With demand from strong population growth (Australia’s population grew by approximately 500,000 in the 2024-25 financial year, driven largely by migration) and supply unable to keep up, prices continue to rise.
The Equity Recycling Effect
Here’s the crucial detail buried in the data: most of the profit is not leaving the property market. Sellers who bank a $500,000 gain on their house don’t pocket it and invest in shares. They roll it into their next purchase.
“The vast majority of that wealth is rolled back into the housing market,” Dr Powell noted. “What we see in practice is most people reinvest into another home. You only have cash wealth when you are downsizing or exit the market entirely.”
This equity recycling creates a self-reinforcing cycle. Upgraders use their profits as deposits for more expensive homes, pushing prices up further. Downsizers use their windfall to help adult children enter the market (the so-called “Bank of Mum and Dad”). And investors use accumulated equity to leverage into additional properties.
The total value of Australian residential real estate reached $12.5 trillion by the end of February 2026, according to Cotality (formerly CoreLogic). Outstanding mortgages against all residential housing sit at $2.5 trillion, a comfortable 20% loan-to-value ratio at the aggregate level.
The Other Side: Where Sellers Are Losing Money
Not everyone is winning. While just 2.5% of house resales nationally resulted in a loss, the median loss figures are significant, and growing.
House Resale Losses (H2 2025)
| City | % Loss-Making | Median Loss | Annual Change in Loss |
|---|---|---|---|
| Sydney | 2.1% | -$191,500 | +74.1% |
| Melbourne | 4.1% | -$55,000 | +10.0% |
| Brisbane | 0.5% | -$278,100 | +363.5% |
| Perth | 0.5% | -$300,000 | +130.8% |
| Canberra | 6.9% | -$68,500 | +14.2% |
Source: Domain Profit and Loss Report, March 2026
The most striking trend here is the size of losses when they do occur. In Brisbane and Perth, the cities with the highest share of profitable resales, the few properties that sold at a loss delivered massive median losses of $278,100 and $300,000 respectively. These are likely premium properties purchased near market peaks that were sold under distress or time pressure.
Canberra stands out as the weakest capital. It was the only city to record an annual decline in the share of profit-making resales, reflecting softer price growth tied to public sector employment uncertainty.
Melbourne continues to underperform. At 4.1% of house resales resulting in a loss, it has the second-highest loss rate among capitals. The city’s property market has been weighed down by COVID-era oversupply, weaker population growth relative to Queensland and Western Australia, and a higher concentration of investor-grade apartments that have struggled to recover.
The Generational Divide: Who Wins and Who Loses
The Winners
Long-term homeowners who purchased a decade or more ago are sitting on life-changing equity. A Sydney homeowner who bought the median-priced house in 2016 for around $1 million could sell today for approximately $1.75 million, pocketing $750,000 before selling costs.
Downsizers are among the biggest beneficiaries. Selling a large family home in a capital city and purchasing a smaller property (or moving to a regional area) can free up $300,000 to $500,000 or more in cash equity. This money can fund retirement, top up superannuation using the downsizer contribution (up to $300,000 per person), or assist children with their first home purchase.
Investors with long holding periods are also reaping rewards. Those who bought investment properties in Brisbane or Perth five to seven years ago are now seeing both strong capital gains and healthy rental yields, with gross yields around 3.5% to 4.5% in those cities.
The Losers
First home buyers face the most daunting challenge. To buy the average Sydney house, they need approximately $319,800 for a 20% deposit. In Brisbane, the figure is $230,000. In Perth, it’s around $210,000.
These numbers assume buyers want to avoid Lenders Mortgage Insurance (LMI). While government schemes like the First Home Guarantee allow purchases with as little as 5% deposit, the income and price thresholds limit eligibility, and a smaller deposit means a larger mortgage and higher repayments.
Dr Powell acknowledged the growing divide: “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.”
Renters also lose indirectly. As property values rise, rental yields often fall in percentage terms, but landlords still increase rents to keep pace with higher costs. Domain expects rent growth to pick up through 2026, driven by Sydney, Melbourne, and Canberra, adding further cost-of-living pressure on those who can’t yet buy.
What This Means for Property Strategy in 2026
For Existing Homeowners
If you’re sitting on significant equity, now is the time to review your financial strategy. Options include:
- Leveraging equity for investment. A mortgage broker can help you understand how much equity you can access and whether it makes sense to invest, given current interest rates at 4.1%.
- Debt recycling. Converting non-deductible home loan debt into tax-deductible investment debt is a strategy worth exploring with a financial adviser, particularly if you have a substantial equity buffer.
- Downsizer super contributions. If you’re 55 or older, selling your home can allow you to contribute up to $300,000 (or $600,000 per couple) into superannuation outside the usual contribution caps.
For First Home Buyers
The deposit hurdle is real, but it’s not the only path into the market:
- Government schemes. The First Home Guarantee, Regional First Home Buyer Guarantee, and various state-based grants and stamp duty concessions can reduce the upfront cost.
- Units over houses. With median unit profits significantly lower than houses (and prices more accessible), units in growth corridors may offer an entry point.
- Regional markets. Regional areas delivered a $330,000 median house profit nationally, but prices and deposit requirements remain considerably lower than capital cities.
- Family assistance planning. If parents are considering helping with a deposit, structuring the arrangement properly (gift vs loan, impact on stamp duty concessions, and Centrelink asset test implications) is critical. An accountant or financial adviser can help get this right.
For Investors
The data highlights a clear two-speed market:
- Brisbane and Perth offer the highest probability of profitable resale (99.5%) and the strongest profit growth momentum (22.9% and 25.7% annual increases respectively).
- Melbourne remains the riskiest capital for investors, with the highest loss rates for both houses and units, and minimal profit growth at just 1.6% annually for houses.
- Adelaide sits in a sweet spot: high profitability (98.2%), solid median gains ($539,500), and relatively affordable entry prices compared to Sydney.
However, rising interest rates (the cash rate is now at 4.1% after two consecutive RBA hikes) are compressing yields and increasing holding costs. Any investment decision needs to factor in the possibility of further rate rises in May 2026 and beyond.
The Bigger Picture: A $12.5 Trillion Market
Australia’s residential property market is now valued at $12.5 trillion. That’s more than the combined value of the ASX and Australia’s superannuation pool. It represents the single largest store of household wealth in the country.
The record profit data underscores just how central property ownership has become to Australian financial security. For those who own property, it provides what Dr Powell calls a “financial shield” in uncertain times. Rising interest rates, inflation, even the economic uncertainty caused by the Iran conflict, are less threatening when you’re sitting on hundreds of thousands of dollars in equity.
But for those locked out, the divide deepens with every year of price growth. The median age of a first home buyer in Australia has risen from 31 in 2016 to 36 in 2026, according to Australian Bureau of Statistics housing finance data. Without policy intervention that meaningfully increases housing supply or reduces demand pressures, this trend is unlikely to reverse.
How a Mortgage Broker or Financial Adviser Can Help
Whether you’re looking to leverage your existing equity, plan a downsizing strategy, or navigate the deposit challenge as a first home buyer, professional advice can make a material difference.
A mortgage broker can compare hundreds of loan products to find the best rate and structure for your situation, particularly important in a rising rate environment. A financial adviser can help you understand how property fits into your broader wealth strategy, including superannuation, tax planning, and retirement goals.
Find a verified mortgage broker or financial adviser on WealthWorks to get started.
Frequently Asked Questions
What percentage of Australian house resales made a profit in 2026?
According to the Domain Profit and Loss Report (March 2026), 97.5% of house resales nationally delivered a profit. In Brisbane and Perth, that figure reached 99.5%, the highest of any capital cities.
What is the median house resale profit in Australian capital cities in 2026?
The median profit on a house resale across combined Australian capitals was $530,000 in the second half of 2025. Sydney led with a $750,000 median profit, followed by Brisbane ($580,000), Adelaide ($539,500), and Perth ($528,000). Source: Domain Profit and Loss Report, March 2026.
How much deposit do first home buyers need to buy a house in Australia in 2026?
To avoid paying Lenders Mortgage Insurance (LMI), first home buyers need a 20% deposit. For the average Sydney house, that means saving approximately $319,800. In Brisbane, the deposit required is around $230,000. These figures are based on median house prices as at early 2026.
Which Australian cities had the highest property resale losses in 2026?
Canberra recorded the highest share of loss-making house resales at 6.9%, followed by Hobart (5.7%) and Darwin (5.1%). Melbourne also underperformed at 4.1%. These cities have experienced softer price growth compared to Perth, Brisbane, and Adelaide. Source: Domain Profit and Loss Report, March 2026.
What is driving record property profits in Australia in 2026?
Several factors are driving record resale profits: long holding periods that span multiple price cycles, chronic housing undersupply, strong population growth through migration (particularly in Brisbane and Perth), constrained new construction due to labour shortages and elevated building costs, and the recycling of existing equity back into the market by upgraders and downsizers.
Is the housing wealth divide getting worse in Australia in 2026?
Yes. Domain's chief economist Dr Nicola Powell noted that record profits are creating a wider gap between established owners and aspiring buyers. The barrier to entry is increasingly defined by existing family equity rather than individual savings alone, making intergenerational wealth transfers a growing factor in home ownership. The total value of Australian residential real estate reached $12.5 trillion by February 2026.
