The share of profit-making resales continued to rise from the COVID-induced low in June last year, marking a substantial rise during the first three months of 2021, according to the latest report from CoreLogic.

Over the first quarter of the year, the proportion of profit-making resales rose to 90.3%, up from the 89.1% during the previous quarter. This was a substantial improvement from the trough of 86% recorded in June last year.

Eliza Owen, head of research at CoreLogic, says the increase in the rate of profit-making resales has come off the back of the stellar growth in Australian dwelling values.

“Between the market bottoming out in September 2020, and the end of March 2021, Australian dwelling values have risen 8.2%. The total profit reaped by sellers in Q1 2021 was $30.6bn nationally. This is actually down from $32.2bn in the December quarter, but that is likely a reflection of seasonally lower sales activity through the start of the year,” she said.

The first three months of the year also marked the fourth consecutive quarter in which regional Australian resales sustained a higher rate of profitability than in the capital city markets.

However, the gap in the rate of profit seen between capital cities and regions has narrowed.

Still, Owen said a broad-based housing market upswing continues to support improved profitability in housing market resales.

“However, with the dwelling market at extraordinary record high values, there are potential headwinds for buyers to be cautious of. At the national level, these include affordability constraints, eventual mortgage rate rises and the remaining threat of COVID clusters,” she said.