Property Equity Hits Record as First-Home Buyers Face Toughest Market in 15 Years

I bought a place in Western Sydney in 2007, three months before the GFC. Everyone told me it was a sure thing. It took me six years to get back to what I paid. I think about that purchase every time someone tells me Sydney property only goes up, because it mostly does, until it doesn't, and the people who get hurt worst are the ones who stretched furthest.

The latest Domain Profit and Loss Report for March 2026 shows we're in an entirely different market now. 97.5% of house resales turned a profit in the second half of 2025. That's the highest rate since 2010, before the European debt crisis rattled markets. For the first time in 15 years, every capital city posted profit rates above 90%. The median national house profit was $440,000, up 14.9% from the previous year.

If you're selling, this is your market. If you're trying to get in, this is the hardest it's been since the early 1990s recession.

Sydney Profits Lead, But the West Catches Up

Sydney sellers took home the biggest median profits, at $750,000 per transaction. That figure sounds abstract until you translate it into what that means on the ground. A three-bedroom house in Eastwood that sold for $1.1 million in 2019 went for $1.85 million in late 2025. A renovated terrace in Annandale that changed hands for $1.4 million in 2020 sold for $2.15 million. These aren't trophy homes. They're family houses on standard lots.

But here's where the story gets interesting: Perth and Brisbane both posted profit rates of 99.5%. Nearly everyone who sold made money. That hasn't happened since the mining boom years of 2011 to 2013, when the resource states dominated national property markets.

The barrier to entry is increasingly defined by existing family equity, rather than individual savings alone.

— Dr Nicola Powell, Domain Chief of Research

Brisbane's median house profit was $370,000. Perth's was $330,000. Those are smaller numbers than Sydney, but the success rate tells a different story: western markets are back. For the first time since the commodity price collapse, Brisbane and Perth are outperforming the east coast in profitability consistency.

Brisbane Units Overtake Sydney

The unit market produced an even more striking result. Brisbane's median unit profit reached $185,000 in the second half of 2025. Sydney's was $175,000. That's the first time Brisbane has beaten Sydney for apartment profitability in modern records.

Drive through South Brisbane or Fortitude Valley and the cranes tell the story. High-rise development has flooded the market with new stock for a decade, but resale values are holding because of something economists don't model well: people want to live there. The lifestyle appeal of inner Brisbane has caught up to the pricing.

Sydney units still dominate in absolute volume. There were more unit sales in Sydney than Brisbane and Perth combined. But profitability margins have compressed. A two-bedroom apartment in Zetland that sold for $680,000 in 2020 might fetch $850,000 now. That's a $170,000 profit, solid by any standard, but Brisbane's equivalent gains are happening faster and from a lower base.

Who's Left Out

The Domain data doesn't include loss-making sales in detail, but the 2.5% of sellers who took losses were concentrated in outer suburbs with poor transport links and limited job access. Melton in Melbourne. The outer reaches of Western Sydney beyond Penrith. Satellite towns in regional Queensland that bet on mining resurgence that didn't arrive.

The real story isn't in the losses, though. It's in who can't buy at all.

The real winners are those who are in the market, and the losers are those trying to get in.

— Dr Shane Oliver, AMP Chief Economist

The typical household in Australia can now afford just 15% of homes for sale, according to separate CoreLogic affordability data. Four years ago, that figure was 43%. The collapse is sharpest in Sydney and Melbourne, where households earning the median income can afford around 8% of available stock.

What changed wasn't just prices. Lending standards tightened after APRA's serviceability buffer increased to 3% in late 2021, and the cash rate went from 0.1% to 4.35% in 18 months. A household earning $120,000 combined could borrow $720,000 in early 2022. By mid-2023, that borrowing capacity had dropped to $580,000. Prices kept rising anyway, because the buyers were different.

The Equity Advantage

The market has split into two classes: buyers with existing equity and buyers without it. If you own a house in Sydney and it's gained $750,000 in value over the past decade, you can access a chunk of that through refinancing or selling down. You're competing with a $200,000 deposit instead of $80,000. That difference decides the auction.

First-home buyers trying to save their way in are running on a treadmill that's speeding up. Say you're saving $30,000 a year as a couple, which is above median. Sydney house prices grew 9.2% in 2025. A house that cost $1.2 million in January 2025 was worth $1.31 million by January 2026. Your savings gained $30,000. The house gained $110,000.

The gap isn't closing through individual effort. It's closing through family help. Dr Nicola Powell's comment about family equity defining the barrier to entry is the polite way of saying that intergenerational wealth transfer is now a prerequisite for home ownership in Sydney and Melbourne. Bank of Mum and Dad isn't a casual top-up anymore. It's structural.

What Comes Next

The RBA left rates on hold at 4.35% in March 2026, with the next review scheduled for April. Market pricing suggests a 60% chance of a cut by June, but inflation data has been stickier than the board expected. Services inflation ran at 4.3% in the December quarter, well above the 2-3% target band.

If rates do come down by 50 basis points over the second half of 2026, borrowing capacity will improve marginally. A household earning $120,000 could borrow an extra $40,000. That won't change the fundamental dynamic. Equity holders will still dominate.

The property market in 2026 looks less like a cycle and more like a ratchet. Prices rise, some buyers get priced out, the remaining buyers are wealthier, prices rise again. The people who made $750,000 on a Sydney house sale are the same people bidding $1.8 million on the next one. The equity compounds.

For sellers, the message from the Domain data is clear: you're selling into the strongest market in 15 years. For buyers trying to enter without existing equity, the message is bleaker. The gap has widened, and saving alone won't close it. Family support, regional relocation, or waiting for a correction that may not arrive are the realistic options left.