Nicola Powell

Domain, a CoStar Group (NASDAQ: CSGP) leading online residential marketplace, has revealed Australian homeowners are in their strongest financial position to date, as national median resale profits reach new record highs. 

For the first time in 15 years, over 90% of house resales in every capital city have turned a profit, according to Domain’s latest Profit and Loss Report. These persistent and widespread gains are driving a wave of upgrades and intergenerational wealth transfers, in turn sustaining strong demand and price growth in the property market. 

This accumulated wealth is acting as a financial shield for a significant proportion of the population, while first-home buyers and recent entrants to the market continue to face affordability hurdles and interest rate uncertainty. 

Key findings:

• Record gains are widespread:

  • In the second half of 2025, 97.5% of house resales and 88.3% of unit resales across Australia delivered a profit.

  • Record median profits were seen for Sydney houses ($750,000); Brisbane houses ($580,000) and units ($325,000); Adelaide houses ($539,500) and units ($290,000); Perth houses ($528,000) and units ($226,050) (Tables 1 and 2).

• The rising middle market:

  • Profitability is not confined to prestige areas; many established, family-oriented suburban middle-ring markets recorded near-universal gains, demonstrating the market’s strong growth at every price point.

• Sydney leads in equity levels:

• • Sydney’s annual median profits rose by 11.1%, and the city holds the largest levels of housing equity due to higher price points and longer holding periods. In high-value markets like the Eastern Suburbs, the median house resale profit reached a massive $2.77 million.

• Brisbane, Perth and Adelaide lead in wealth expansion:

• • Brisbane and Perth recorded the highest proportion of profit-making house resales (99.5%). The annual change in median profits was also up by 22.9% in Brisbane and 25.7% in Perth, the highest changes nationally (Table 1).

  • Adelaide followed closely, with 98.2% of house resales making a profit and median profits up 15.5% annually.

  • The record high profits across Adelaide, Brisbane and Perth reflect the steady growth and equity accumulation seen in these cities since 2021, supported by strong migration flows and constrained supply.

• Melbourne, Canberra, Hobart and Darwin cool:

• • While still recording high levels of profitable resales, Melbourne, Canberra, Hobart and Darwin’s profit shares were lower compared to other capitals, and median profits in these cities were lower relative to four years ago.

  • Canberra was the only capital city to record an annual decline in the share of profit-making resales, reflecting softer price growth.

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Nicola Powell

Domain has described the Australian Prudential Regulation Authority’s (APRA) announcement of a new 20% limit on high debt-to-income (DTI) mortgage lending as a proactive, measured intervention designed to manage systemic risk, rather than a circuit breaker for property prices.

The new cap, which restricts banks to issuing no more than 20% of new loans at six times a borrower’s income or higher (effective February 1, 2026), is being implemented as the housing market enters a new phase of momentum driven by easing interest rates and rising credit growth.

“This cap is best understood as a guardrail being put in place before lending standards begin to loosen, not as a sudden handbrake on the market. APRA is acting pre-emptively, showing a light but firm touch at exactly the right time in the cycle, where we’re seeing a lift in riskier lending, particularly among investors,”  commented Domain’s Chief of Research and Economics, Dr. Nicola Powell.

“Crucially, the cap is not currently binding for the majority of lenders, meaning it won’t alter borrowing power or restrict credit access for most buyers in the short term, including first-home buyers who often borrow lower than the DTI threshold. It simply creates a mechanism to automatically slow high-risk lending if it accelerates in the future.

“While the limit could start to influence investor behaviour down the track if high-DTI volumes surge, for now, it’s a policy that strengthens the system’s resilience without punishing households or dampening the essential need for new supply.”

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Nicola Powell

As this week’s Economic Roundtable commences, Domain’s Chief of Research and Economics Dr Nicola Powell warns that stamp duty is one of the biggest barriers to a fair and efficient housing market — making it harder for Australians to buy, sell, or move.

In some eastern states, stamp duty costs have grown more than three times faster than disposable incomes since 2000. The result is a tax that distorts housing choices, discourages mobility, and locks people out of home ownership.

Replacing stamp duty with a broad-based land tax, as the ACT has begun to do, would improve housing efficiency, support a more flexible labour market, and deliver more stable, predictable revenue for governments. But real reform will require federal leadership and transitional support.

The Economic Roundtable is a key opportunity to address one of Australia’s most harmful and outdated taxes.

Read the full analysis and data.

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Nicola Powell

Key points:

• Sydney house prices rose 40% from the trough in June 2020 through to March 2022 – the quickest and sharpest equity boost on record.
• Despite this, we are witnessing an overall slowing momentum, with the average time a Sydney house spends on the market increasing by 8 days since the 2021 low and certain affluent NSW pockets experiencing a decline in property value.
• This slowdown in price growth is expected to continue and purchasing conditions to improve for buyers, however as historically seen, prices are unlikely to dip below pre-pandemic levels.
• The Federal government’s Help to Buy (HTB) scheme, the NSW government’s trial of a shared equity scheme for essential workers and single parents, and proposed NSW stamp duty reform may offer steps in the right direction towards longer term affordability and accessibility of homeownership in NSW.

Domain’s inaugural NSW Spotlight Report shines a light on the property landscape in Australia’s most populous state and what we can expect in the future, aiming to inspire confidence in all life’s property decisions. The drastic property boom over the last decade, which heralded in the Golden Era for NSW property and lifestyle, has established the state’s capital city as one of the most expensive housing markets in the world.

Commenting on the launch of this bespoke report, Domain’s Chief of Economics and Research, Dr Nicola Powell said, “The NSW property market has been an understandably hot topic of discussion in recent years and will continue to be. The state caters to an extensive range of demographics, both internal and overseas migrants, with a variety of landscapes, business hubs and world-class education, making the property market unique and widely sought after. It’s for these reasons that we knew a Report of this nature, coming off the back of a unique two years, would be an incredibly valuable look at the factors that contributed to a booming property market, and what we can expect to define the property market in the future.”

Key take-outs from Domain NSW Spotlight Report

The peaks and troughs of Sydney’s house price cycle Soaring house prices in NSW in recent years provided the quickest and sharpest equity boost for houses, making home ownership a distant dream for many, with growing affordability constraints set against a backdrop of slow wage growth. For example, Sydney house prices had the steepest upswing on record with an increase of 40% from the trough in June 2020 through to March 2022.

Dr Powell commented on this saying, “House prices across all Sydney suburbs experienced an increase in price over the past year, ranging from 6% to almost 58%, widening the wealth divide between home owners and non-homeowners, and stretching the ability of others to upsize. It’s pretty easy to find a million-dollar suburb in Sydney, with many regions having none below that price.”

The Domain NSW Spotlight Report reveals that there are signs of reprieve for buyers on the horizon, with Sydney’s price growth rate experiencing one of the most significant slowdowns of all capital cities, due to flattened house prices and declining unit prices. A year ago, house prices were rising 46 times the current pace, and at the same time unit prices were also increasing – this indicates that Sydney’s steepest upswing on record has ended, swinging power back towards buyers.

Dr Powell adds, “Historically, downturns have been shorter and less severe compared to the preceding upswing. We are expecting the slowdown in price growth to continue and purchasing conditions to improve for buyers but it is unlikely we will see a return to pre-pandemic prices.”

Shifting market conditions impact supply and sales

The overall slowing momentum in the NSW property market can be seen with the average time a property spends on the NSW market drawing out. In fact, Sydney has had one of the biggest increases in the country in selling time. With Sydney houses significantly taking a longer time to sell, buyers can breathe a sigh of relief as the speedy days of transacting property are changing. Looking at the numbers, it is taking an 8 days extra for Sydney houses, and 1 day extra for Regional NSW houses, to sell compared to the recent multi-year low.

Not only are selling times slowing, but supply is gradually improving – with houses listed for sale in Sydney up by 8% and up 10% for units, annually. It remains more challenging for buyers in Regional NSW, with the total number of houses for sale 1% higher compared to last year and 13% lower for units.

Dr Powell added, “Sellers have become more strategic with their market timing, listing homes for sale while prices remain close to a peak and before additional interest rates rise further puts a strain on borrowing capacity and mortgage affordability. This is encouraging for buyers as they slowly take back charge as the supply of properties for sale builds, creating better purchasing conditions, providing home hunters time to contemplate rather than compromise, and ultimately allowing rational decisions to be made. There is greater choice and the pleasure of taking a little time if you’re looking to buy.”

Buyer preferences driving demand

The supply-demand dynamics have been shifting in 2022, as buyers are getting back into the driver’s seat. This changing balance is slowly rippling across Sydney, with sellers needing to be more realistic with pricing due to an increase in the supply of homes.

So, what are buyers looking for? The most bought property type^[1] in Sydney are houses (52%), followed by units (42%) and townhouses (7%). While houses are the preferred property type in Sydney by a small margin, there’s a more even split of sales between houses and units in comparison to regional counterparts. This more even sales ratio between houses to units ratio can be pinned to the affordability issues of living in a pricey city.

Breaking down the drivers of demand for Sydneysiders further, an analysis of Domain’s keyword search reveals the specific attributes or features that prospective NSW home hunters are looking for to help distinguish between changing trends or fleeting moments of desirability:

• Being by the water is unsurprisingly top of mind as “waterfront”, “view”, “river” and “beach” all rank in the top keyword searches
• The priority placed on outdoor space continues to shape the ideal Sydney home, with a “garden”, “courtyard” and “balcony” high on a Sydney buyer’s wish list. Interestingly, outdoor space does not feature in the top 10 keywords for regional NSW buyers.
• A dedicated workspace in the home is key for Sydneysiders, with the search for “study” being the second most used keyword in Sydney, alongside keywords on outdoor space and other lifestyle features. This is no doubt due to people making the most of the popularised hybrid working policies.

Sydneysiders, prominently Gen X and Millennials, are being increasingly drawn towards Regional NSW, with 33% of total inquiries on Domain to Regional NSW in April 2022 being made from Sydney. Collectively, this demographic are in the prime of their working years (25-44 years) with families in tow (0-14 years) and are the biggest group moving to Regional NSW for greater affordability, a laid-back lifestyle and more space.

“There are crystal-clear differences between Sydney and Regional NSW buyer preferences. With more people making the regional move, it has refocused people’s attention on the type and surrounding area of their new home. Whereas, the laser focus on being by the water is clear for Sydney preferences – with suburbs such as Kurraba Point, Whale Beach, Lavender Bay, Clontarf, Canada Bay, Patonga being Sydney’s most desired spots,” said Dr Powell.

Dr Powell adds, “Affordability continues to play a significant role in home searches, with keywords such as ‘duplex’ and ‘dual’ scoring a seat in the top 10 most used keywords in 2022. This is happening across Sydney and regional areas, particularly as people are being drawn out of the city. This suggests that rapidly rising house prices and slow wage growth have constrained affordability, and they’re now looking for an affordable alternative such as a split block.”

What can we expect from the NSW property market in the future?

All eyes are on the newly appointed government’s efforts to alleviate affordability constraints and increase the chances of homeownership.

Commenting on the federal government’s Help to Buy (HTB) scheme, Dr Powell said, “The scheme aims to assist first-home buyers with both the deposit and mortgage repayments, propelling buyers into the property market earlier and helping those who may not be able to buy otherwise. The scheme has the potential to get buyers into the market up to 11 years earlier due to the low deposit needed, however, it’s worth noting that it can only help 6% of first-home buyers nationally each year and this comes with the need for applicants to be mindful of their long-term financial position to maintain mortgage repayments and maintenance of the property.”

Moreover, with interest rate hikes, the cost of a home loan is increasing and reducing borrowing capacity at a time when living costs are soaring. Tax settings, banking regulation, population and income growth, and the responsiveness of new housing supply to growing demand all influence property prices. The speed and scale at which Sydney prices soften depend upon many factors, however, the downturn will be largely shaped by how high and quickly interest rates go up, and how high inflation reaches.

Dr Powell comments, “The current level of household debt makes Australian mortgage holders sensitive to higher interest rates that will squeeze household budgets. The higher level of debt means that the RBA won’t need to increase rates as much as it has in the past to cool inflation. Property prices are partly driven by momentum, which means when prices fall this is likely to lead to further price falls – fear can feed fear, both positively and negatively.”

Most recently, the proposed changes to NSW stamp duty reform have come as a welcome change to improve accessibility and affordability, and encourage ‘rightsizing’ in the local property market.

“Stamp duty is a major source of tax revenue for state governments but it is one of the least efficient taxes with huge economic and social costs. Designing a successful tax system for NSW will significantly improve the accessibility of homeownership and reduce the friction of rightsizing our homes based on life stage. Stamp duty reduces property transactions due to the sizeable lump sum and means people are less likely to live in a home that suits their needs. This changes our life decisions, resulting in many people commuting for longer, not changing jobs, or living in a house unsuited to their lifestyle.”

Read the report.

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[1] 1 Domain, House price report March 2022, powered by APM. Based on sales over the 12 months to March-22. Percentages are rounded to the nearest whole per cent, therefore, may not add up to 100% exactly.

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Domain’s First-Home Buyers Report is focused on identifying the time it takes for a couple aged between 25-34 to save a 20 per cent deposit for an entry priced property across our capital cities and regionally based on the average dual income. The Report also reveals the areas and types of properties that are providing Australians with the strongest opportunities to get onto the property ladder.

Across the majority of Australia’s capital cities, the journey to entry-home ownership has increased compared to the same time last year, on average adding an extra 11 months of time spent saving. For units, there has been an increase of 3 months.

In a climate where incremental wage growth and rising mortgage repayments and rental prices are paired with escalating property prices, the prospect of saving the lump-sum deposit is becoming more challenging. Testament to this is that over the past 20 years, average annualised growth in capital city dwelling prices has been over double that of the annualised wage price growth.

Sydney continues its reign as the city to have the longest time to save an entry-house deposit, at 8 years and 1 month. Canberra has overtaken Melbourne in second place, at 7 years and 1 month. Sydney and Canberra have also seen the largest increases over the past year, spiralling by 18 months.

Perth remains the best city for first home buyers, with the quickest savings time at 3 years and 7 months for an entry-house, less than half of the time taken in Sydney. Fortunately, Perth has only seen an increase over the past year of one month and has even declined by one month over the past five years.

Encouragingly, first home buyers will find the time to save for an entry-unit significantly shorter than a house, with a modest increase in time to save across most cities. Units offer a more budget-conscious approach, with an average of 18.4% of income dedicated to mortgage repayments across the capitals compared to 27.1% for a house.

Discussing the findings of this year’s report, Domain’s Chief of Research and Economics, Dr Nicola Powell, commented: “The annual Domain First-Home Buyers Report enables us to analyse the market variables that contribute to housing affordability, and compare annual growth across cities and areas. First home buyers are facing a growing financial hurdle when it comes to saving a deposit, and this is becoming more daunting in the context of rising living costs, low wage growth, weak saving rates and the rapid rise in property prices. Our hope with this report is that we are able to equip first-home buyers with the latest information to help consider location, size and type of property as they embark on their property journey.”

First home buyers have traditionally looked further afield to seek value for money and compromised on commute times, or compromised on space and purchased something smaller but more centrally located to the CBD or public transport hubs. Remote working has made this balance easier for those able to adopt a hybrid way of working between the office and the home and opened up where they can reside, with more people willing to push further afield from their employment base. In turn, this has prompted a rise in keywords searches on Domain associated with lifestyle, greater space, garden and yard as doors to greater affordability have been opened for those who are now able to live in the outer suburbs.

On this, Dr Nicola Powell commented, “The decentralisation of our workforce is being embraced by middle Australia, with some working from home, even if it is for a couple of days a week, and awakening affordability. In saying this, we know that not everyone is able to do this, with often lower-income workers needing to be close to their workplace as they are unable to work from home. When navigating the first home buyer’s market, considering property type and location, or even becoming a rentvestor, can all be worthwhile. Government incentives such as the First Home Loan Deposit Scheme or the First Home Super Saver Scheme, which allows prospective first-home buyers to make additional superannuation contributions that are later accessible for a first home deposit, can also be advantageous to shave years off the time it takes to save for an entry-priced deposit.”

Read the report.

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