The neighbourhoods where the most homes sell at a loss
'Australia-wide, of all the loss-making sales, 63 per cent were units. But in any given quarter, units only make up about 30 per cent of all sales. That means units have a disproportionate level of loss making, and that loss-making comes down to just a few pockets.'
For the March quarter, the Melbourne City local government area had the highest rate of loss-making sales in the country at 47.6 per cent. The next highest portion of sales at a loss in Victoria was in Stonnington at 36.6 per cent, then Yarra at 27.4 per cent and Port Phillip at 27 per cent.
In Sydney, it was the Ryde (26.5 per cent), Parramatta (23.6 per cent) and Burwood (22.5 per cent) local government areas, for the same time period.
Westpac senior economist Matthew Hassan said these areas were unit-dense, which would pull down the regions' profitability.
'For some time now we've observed quite a difference between units and houses. There are some reports that with units … new units can depreciate initially and there are some submarkets where there's a premium on brand new versus slightly older units,' he said.
'This is about the preference shift we've seen since 2019 towards detached houses, but also the legacy of construction issues. Which I would have hoped would be behind us now.'
The report comes as Domain has forecast house prices across the combined capitals to jump up by 6 per cent over the next 12 months, as Sydney and Melbourne drive growth, with other major cities set to soften.
Melbourne prices were tipped to grow 6 per cent over the same time period to reach a record median of $1.11 million, according to Domain's latest Price Forecast Report. Dr Nicola Powell, Domain's chief of research and economics, said Melbourne's property market has been 'undervalued in relative terms, and that value … is now bringing demand back'.
Powell predicted Sydney house prices would grow 7 per cent to $1.83 million.
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She said Sydney and Melbourne were quick to react any changes in the cash rate.
The major four banks have issued varying forecasts for home prices across capital cities in the 2026 calendar year. NAB predicted an increase of 5.6 per cent, CBA tipped 7 per cent and ANZ 3.8 per cent growth. Westpac forecast a 7 per cent increase in dwellings across the five major capital cities across 2026.
ANZ economist Madeline Dunk said the bank's forecasts were published before the Reserve Bank's rate cut in February and may have undersold potential growth next year.
'We were surprised at the response coming through following rate cuts – when you look at previous times, it takes a while for rate cuts to feed through to market activity,' she said. 'This time, we saw an immediate jump in house prices in Cotality data … so there is some upside risk to our forecast given we have seen a reasonably solid response.'
Hassan said profitability rates were not likely to improve until home price growth accelerated next year; Westpac was predicting only 3 per cent growth in 2025. 'We see this year as a bit of transition year for house prices, and you get interest rate cuts generating a bit of momentum and generating a bit of traction in those softer Sydney and Melbourne markets.'
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