Australia's property market is enjoying a surge in seller profitability not seen in two decades, but the numbers mask a troubling reality for owners in a select group of suburbs where making a loss remains the norm rather than the exception.
According to property research firm Cotality's latest Pain and Gain report, 95.5 per cent of sellers made a profit during the September quarter, with the average gain now at a record of $335,000 per sale. Yet this national euphoria obscures severe regional disparities that leave some property owners facing paper losses when they sell.
The problem is concentrated in a specific property type and geography. Units made up just a third of resales, but accounted for 68.9 per cent of all losses. Melbourne's inner suburbs are the epicentre, with unit apartments proving especially treacherous as an investment class. Melbourne's unit market accounted for the biggest national share of losses at 29.1 per cent, with other areas where losses were concentrated including Parramatta, Port Phillip, Sydney and Stonnington.
The data paints a stark picture of which suburbs are struggling most. Melbourne recorded 45.5 per cent of all sales with average $55,000 losses; Stonnington saw 29.8 per cent of sales with average $48,000 losses; Port Phillip had 26.3 per cent of all sales with average $36,500 losses; and Parramatta experienced 24.1 per cent of all sales with average $50,000 losses. In Sydney, Strathfield and Ryde posted loss rates above 22 per cent each.
This sits in sharp contrast to markets elsewhere in the country. Brisbane was the most profitable market, with 99.8 per cent of sales making a gain, with an average of $444,000 pocketed across houses and units. The divergence reflects underlying structural differences in these markets: supply pressures, unit oversupply in certain inner suburbs, and the resilience of house-focused markets in Queensland and Western Australia.
The outlook is uncertain. Cotality head of research Eliza Owen said the path for profitability was 'less certain' in 2026, noting that in 2026 the path for profitability is less certain because of the changed outlook for interest rates, which will be an issue for recent home buyers in particular. Weakening market conditions, as seen by the capital city clearance rate dipping below 60 per cent at the end of 2025, often coincide with slowing rates of profitability, with some higher-value segments in Sydney already moving into decline, which could test the resilience of profitability for short-term sellers in the year ahead.
Property ownership in Australia remains financially sound for most buyers, yet this snapshot reveals that broad national averages can conceal stark local realities. The suburbs where losses persist are not evenly distributed; they are concentrated in specific apartment-heavy precincts where market dynamics have worked against buyers. Those considering entry or exit in these markets should factor in the genuine risk of capital loss, particularly if forced to sell during weaker demand periods. The property boom has two speeds, and some buyers are learning that geography and asset type matter far more than nationwide sentiment.