Amy and Thomas Field with their daughter Keira and dog Nash, are selling their three-bedroom apartment to upsize to a house. Picture: Tim Hunter.
Real estate has been a staggering money maker for Sydney’s lucky homeowners, who have been pocketing up to $100,000 a year from their properties in some city areas.
It comes as another housing boom late last year put sellers in a position to command inflated prices well above what they paid for their properties.
A CoreLogic review of property sales last year showed close to 92 per cent of property sellers made a profit off their sale, with profits averaging more than $500,000 in the most sought after regions.
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And with rock bottom interest rates funnelling more buyers into the market at a time of low housing supply, sellers are expected to continue pocketing huge sums.
No. 41 Princes St in Hunters Hills sold in 2020 for $2.4 million. It had previously sold in 2013 for $1.35 million.
This home in Manly resold for a profit of $510,000 after just four years.
CoreLogic head of research Australia Eliza Owen said the housing market would strengthen in the coming months.
“With record low mortgage rates, a faster than expected economic recovery and relatively low cases of COVID-19, profitability is tipped to trend upwards over the coming quarters,” she said.
Sellers tended to make bigger profits the longer they owned their homes, while owners who lost money on their properties were often those who sold soon after buying, Ms Owen added.
The majority of sellers who lost money were also investors transacting units in areas with a high supply of new high-rise apartments.
The bulk of the profitable sales were from owner occupiers selling freestanding houses in low density areas.
CoreLogic’s quarterly Pain and Gain report showed home sellers netted the biggest profits in the up-market Hunters Hill council area last year.
Close to 98 per cent of sellers in the region offloaded their homes for more than they paid for them and the median profit was about $1.19 million.
No. 19 Ida Ave in Mosman sold in 2020 for $4.625 million. The previous price was $3.1 million in 2015.
The typical seller had owned their properties for just over 10 years before listing their homes, netting them about $112,000 for each year they owned their property.
Laing and Simmons-Hunters Hill agent John Priddy said buyers in the area were scrambling for freestanding houses, which remained in short supply.
“The market right now is as buoyant as you can get,” he said. “There is a real lack of quality homes on the market, which is leading to many buyers running out of patience.”
Profits were also high in other areas in Sydney’s north, including the Ku-ring-gai council area, northern beaches, Willoughby and Mosman.
Median resale profits in these council areas ranged from $585,000-$877,500, with successful sellers typically holding their homes for eight to nine years.
McGrath-Manly agent Tim Cullen said the high prices were leaving sellers “in tears”.
“It’s been life changing,” he said. “It’s allowed some to retire early or go places they wouldn’t have been able to go.”
No. 107 Victoria Rd in Parramatta sold in 2020 for $802,000, before it had sold for $459,000 in 2011.
My Housing Market economist Andrew Wilson said upsizing families were often using the windfalls from sales in areas like the north shore to buy in outer suburbs.
“You could buy a pretty substantial property with the money you’d get from a sale in the inner suburbs,” Mr Wilson said, adding that these upsizing were driving up prices in outer suburbs and regional areas.
Sellers in the Fairfield, Penrith and Blacktown council areas scored average profits of more than $350,000 – usually after about eight years of homeownership.
Profits were lower in the Cumberland and Parramatta council areas, where there was a high supply of newly-built apartments – often constructed to appeal to local and overseas investors.
About 13 per cent Cumberland sellers made a loss on their sale and for those who made a profit, the average was $260,000 – the lowest in Sydney.
This house in Strathfield sold for a profit of $990,000 after seven years of ownership.
About 82 per cent of vendors in the Parramatta council area made a profit on their sales and the average was $280,000.
But local agents reported there was a big mismatch in the level of demand for houses and units in the Greater Parramatta area.
McGrath-Parramatta principal Kon Stathopoulos said larger houses with gardens and the “all-important study” for those working from home were getting hugely popular and selling well.
“The suburbs are back in fashion,” Mr Stathopoulos said. “(People) are looking for larger land sizes and more space.”
Upsizers Thomas and Amy Field said the frantic sales environment was reassuring as sellers but it also meant buying their next home was challenging.
The young family are looking for a larger home. Picture: Tim Hunter.
The couple is on the hunt for a larger home after listing their three-bedroom apartment on Brookvale Ave, Brookvale, for sale and have been coming up against strong competition.
“We’ve been to 15 or so inspections and each time we turn up we see lots of other families with kids just like us … it does take a while, you have to stand in queues,” Mr Field said.
They also had to wait nearly six weeks for the chance to see one northern beaches home because of COVID-19 restrictions on the number of buyers allowed at inspections. There was a feeling many buyers were frustrated, Mr Field said.
“There have been people hunting for more than six months,” he said. “They are the hot buyer ready to hit the button straight away.”
Their apartment will be auctioned on February 6 with McGrath-Manly.
HIGHEST PROFITS
Hunters Hills: $1.19m
Ku-ring-gai: $877,500
Woollahra: $740,000
Mosman: $650,000
Northern beaches: $636,000
Willoughby: $585,000
The Hills: $570,000
Randwick: $570,000
Hornsby: $493,500
Inner west: $465,000
North Sydney: $460,000
LOWEST PROFITS
Cumberland: $260,000
Campbelltown: $265,000
Rockdale: $265,000
Strathfield: $280,000
Parramatta: $280,000
Central Coast: $280,000
Botany Bay: $283,500
Burwood: $293,500
Georges River: $300,500
Blue Mountains: $305,000
Lane Cove: $305,000
Penrith: $312,000
Ctb-Bankstown: $317,000
Hawkesbury: $329,000
Source: CoreLogic
