Domain's latest Profit and Loss report released Wednesday revealed the 'first crack' has appeared in the country's property profitability with the share of homes resold at a profit beginning to slip for the first time in years.
In the first half of the year, 97.4% of house resales generated a profit, down slightly from 97.5% in the second half of 2025.
"The shift, though small, suggests the long run of resale profitability may be coming to an end," Domain chief residential economist Dr Nicola Powell said.
Despite softer conditions, home owners still made record median profits of $458,000 on houses and $237,000 on units, off the back of strong price growth in recent years.
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"This is the first sign that Australia's long run of property profits is starting to ease, but it's far from a collapse in seller fortunes," Dr Powell said.
"Most home owners are still making substantial gains, even as softer market conditions begin to affect resale outcomes."
Market entering a more selective phase
Beyond the slight decline in profitability, Domain's report highlights a widening gulf between Australia's strongest and weakest housing markets.
Perth led the country, with 99.6% of house resales generating a profit, while Brisbane recorded the strongest unit market, where 99.5% of sellers made money.
See also: Perth property market outlook
Almost all Adelaide homeowners (98.8%) resold their homes at a profit.
In contrast, more than one in four (27%) Melbourne apartment owners sold at a loss.
Melbourne also recorded one of the highest rates of loss-making house sales alongside Canberra, with 5.7% of transactions selling below their purchase price.
Dr Nicola Powell said the results point to a housing market that is becoming increasingly fragmented.
"The divide is most evident in the unit market," Dr Powell said.
"More than one in four Melbourne unit sellers are now selling at a loss, while almost every Brisbane unit seller is making a profit."
The Melbourne figures suggest some investors who bought during previous apartment building booms are now facing weaker resale conditions.
"Perth, Brisbane and Adelaide continue to deliver strong results for sellers, while Melbourne and Canberra are showing the clearest signs of weaker market conditions," Dr Powell said.
Sydney remains the most lucrative market
Sydney home owners recorded the largest gains, with a median profit of $739,500 on house resales.
The NSW capital remains the most expensive market, with the latest Cotality HVI revealing the median house price in Sydney is currently sitting at $1,244,617.
In comparison, the national median house price is $928,421 as at 31 July.
However, Sydney, along with Melbourne, has been leading the national decline in home values, with prices now down 2% over the year.
See also: Sydney, Melbourne to lead housing market correction
"Most sellers are still making significant gains, with record median profits highlighting the strength of the wealth accumulated over recent years," Dr Powell noted.
"So it's important to keep these results in perspective."
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