Across greater Melbourne, the rate of profit-making sales fell 20 basis points in the March 2021 quarter, to 94.5%.
Despite the decline, Melbourne was still the second-most profitable capital city in terms of the portion of resales achieving a nominal profit. This was behind Hobart, at 98.4%.
The increase in the rate of loss-making sales was driven by the unit segment, where the portion of loss-making sales increased 120 basis points to 12.8% through the quarter. However, the rate of loss-making sales across Melbourne units is still well below the high of 18.2%, which was seen in the three months to February 2019, when the Australian housing market was nearing the trough of a large downswing.
The City of Melbourne council region remains prominent as having the highest rate of loss-making sales, at 33.3% in the March 2021 quarter. This is up from 31.3% in the previous quarter. This amounted to over 200 loss-making sales in the quarter, all of which were units. The median hold period for loss-making unit sales across the City of Melbourne was 7.9 years. Around 85% of these sales were held by investors.