Australia's housing market is creating wealth like never before.

Here's a stocktake of how things are going.

The money-making machine

In the past 10 years (June 2014 to June 2024), the total value of our residential dwellings has risen from $5.1 trillion to $10.9 trillion (+$5.78 trillion).

Since June 2020 alone, the value of our dwellings has increased by $3.6 trillion.

According to CoreLogic's recent quarterly Pain and Gain Report, Australia's property owners pocketed a record-breaking median nominal profit of $285,000 from resales in the June quarter of this year.

Nationally, the median nominal profit from house sales was $340,000 and for units it was $185,000 (both records).

But it was starker for individual suburbs.

For the Pain and Gain report, released this month, CoreLogic analysed roughly 91,000 resales in the June quarter.

It says the record-breaking gains home owners made from selling their properties was partly a result of national housing values hitting fresh record highs every month since November last year.

It says the record gains could also reflect the fact that many sellers had the ability to properly time their resale for profit "given relatively stable conditions for mortgage serviceability."

But when breaking the data down into local government area regions (LGA), the report shows sellers in some regions of the country have been raking in the profits.

In Sydney, sellers enjoyed the highest median nominal gains from resale of the capital city markets in the June quarter, at $353,000 across all dwellings, and a substantial $615,000 across houses.

For some individual LGAs, the median profit from resales was more than $450,000 — in the Hills district ($627,500), Hunters Hill ($627,500), the Northern Beaches ($550,000), Woollahra ($480,000), Waverley ($466,500), the Hawkesbury ($465,000), the Inner West ($460,000), the Blue Mountains ($458,000), and Wollondilly ($450,000).

The table below shows the median losses for loss-making sales (left-hand side, in orange), and the median profits for profit-making sales (right-hand side, in black), in Sydney's LGAs.

Brisbane had the highest rate of profit-making resales among the capital cities in the June quarter, with 99.1 per cent of resales capturing a profit.

For individual LGAs, the median profit from resales was more than $300,000 in Redland ($388,500), Scenic Rim ($387,500), Brisbane ($345,000), Logan ($340,000), and Moreton Bay ($332,500).

In Melbourne, the rate of profit-making resales fell to 90.5 per cent in the June quarter, with almost one-in-10 sellers making a nominal loss from resale.

That included one-fifth of unit sellers.

But despite that relatively high rate of loss, the city still delivered the fourth-highest median gain from resales across the major cities at $306,000, behind Sydney ($353,000), Adelaide ($335,000), and Brisbane ($333,000).

Stagnant unit sales were the main culprit for the high rate of loss-making in Melbourne's markets, with unit values sitting below a peak from June 2017.

For some individual LGAs, the median profit from resales was above $400,000 — in Nillumbik ($595,000), Bayside ($585,000), Whitehorse ($560,000), Manningham ($526,000), Mornington Peninsula ($477,000), Monash ($442,000), Boroondara ($415,000), Banyule ($413,500), Yarra Ranges ($404,170) and Knox ($401,500).

In Perth, the rate of profit-making from the resale of homes hit its highest level since mid-2014.

CoreLogic says Perth has seen an "extraordinary turnaround in the rate of profitability" since the pandemic period.

More favourable internal migration trends, an upswing in the resources sector and strong subsequent housing demand has seen the rate of loss-making on sales dive from 48.3 per cent in the June quarter of 2020 to just 4.6 per cent four years later.

Since the start of the pandemic in March 2020, Perth home values have seen the highest increase of any capital city market, up 72.5 per cent.

The rapid rise in profitability means Perth's home-owners are holding onto their homes for much shorter periods. The median hold period (before re-selling a property) was almost 16 years at the start of 2020, but that has dropped to 9.8 years.

The median profit for properties re-sold in Cottesloe in the June quarter was $763,000.

The median profits for resales in Nedlands ($490,000), Joondalup ($377,750), Melville ($388,000), Fremantle ($321,000), Kalamunda ($310,000), Mundaring ($295,000), Rockingham ($283,500), Serpentine-Jarrahdale ($280,000), Armadale ($280,000), were above $275,000.

The results for Adelaide, Hobart, Darwin, and the ACT can be found in CoreLogic's report.

Average household size trending down

In May this year, the Reserve Bank of Australia's chief economist, Sarah Hunter, delivered an important speech, "Housing Market Cycles and Fundamentals."

She said the underlying demand for housing is "fundamentally driven" by the size of our population and the number of people that live (on average) in each dwelling.

So how big is our population?

According to Bureau of Statistics data, our estimated resident population has increased by 3.72 million people (23.4m to 27.1m people) in the past decade.

Our population has been growing by an average of 30,968 people a month (371,620 people a year) since early 2014.

During the same period, the total number of dwellings in Australia has increased by 1.8 million (9.36 million to 11.21 million).

We've been building an average of 15,000 dwellings a month (180,000 a year).

That's a fraction more than two people for each new dwelling.

But significantly, Ms Hunter said the average number of people living in each household in Australia has been trending lower for decades, from around 2.8 in the mid-1980s to around 2.5 today.

"This may sound like a small change," she said in her speech. 

"But, if for some reason average household size rose back to 2.8, we would need 1.2 million fewer dwellings to house our current population – no small difference."

See a graph from her speech below.

Ms Hunter said part of the long-run decline in average household size in Australia can be explained by demographic factors.

"The aging of the population means we now have more older couples and singles living alone, and lower birth rates means that the average size of a family is falling over time," she said.

"Working in the other direction has been an increase in the share of young adults living with their parents. This might be because more young people are going to university and living at home for longer, but it could also be due to affordability considerations. And this hints that demographics are not the only factor affecting household size – affordability affects people's choices of where and who to live with," she said.

She said demographic drivers of housing demand tend to be slow moving, but the pandemic period saw some dramatic shifts and acted as a catalyst for change.

It saw a big shift in people's preferences towards more physical living space per person, "which is understandable when lockdowns forced us to spend more time at home," and the shift to working from home reinforced the change.

Ms Hunter said housing supply does eventually respond to growing demand. 

But the speed and magnitude of the response can vary, and it's determined by rental and housing prices, underlying construction costs and the time to design, approve and build, she said.

"In the meantime, prices and rents do the adjusting," she said.

"The extent of this adjustment differs through each cycle and depends on the relative movements in demand and supply."

And at this point of this particular cycle, the price adjustments have been generating record nominal profits for Australians selling their homes.