David Kaity: Should you feel guilty for making profit on a property sale?

West Australian

19-05-2025

Policies tackling housing affordability were front and centre of the recent Federal campaign, and while the major parties proposed various solutions, both acknowledged house prices will continue to rise. The policies from the winning Labor Government, which focused on first home buyers, including a 5 per cent deposit plan, will largely serve to increase demand and prices will keep heading north.
Those already on the property ladder will continue to make profits on their sales. But is there a problem with that?
A billboard by real estate agency White Fox stirred controversy earlier this year with its slogan: 'Making homes more expensive since 2017'. It angered some who claimed that the message was tone deaf in the middle of Australia's current housing crisis. And its location here in Perth bit hard for some, given five-year median home values have risen an astronomical 75 per cent since 2020 and are tipped to be close to the magic $1 million mark by year's end.
The backlash against the billboard also highlights the divide between those who are already on the property ladder and those who are finding it difficult to get a foothold.
So, while the billboard certainly raised eyebrows, it poses several simple questions. Should sellers feel guilty for wanting to get the best possible return, and in doing so set street and suburb records with stratospheric sale prices? And should agents also feel some guilt for facilitating those sales?
First, we need to remember that sale prices are not determined by sellers. Market forces of supply and demand determine final sale prices. Buyers and sellers are at the whim of these forces, and it's my view, that we shouldn't blame either sellers or their agents for the high prices homes are fetching.
We can argue about what is behind the current market forces, which have led to such unaffordable housing for many in this country. The reality is that there isn't just one cause. A large portion of the blame can be attributed to planning and policy failures by governments at the local, State and Federal levels that have been decades in the making.
Regardless of the causes, everyone — even sellers — empathise with the difficulties faced by would-be home buyers who are looking to enter the property market. But if you are a seller, you shouldn't feel guilty about achieving the highest possible sale price, and here's why I believe that's the case.
First let's consider retirees, or senior empty-nesters who need to downsize. If you're like most Australians, your single most significant asset will be your home. The sale price when downsizing will often determine how long you can maintain a comfortable lifestyle in retirement. You will want the highest sale price, and rightly so.
If you have a growing family, you may be selling to upgrade to a larger home. How much you sell for could determine whether your family will have that extra bedroom to accommodate another child or if you can move to a better school catchment.
I will even defend the 'greedy', profit chasing developers here. Without profits, there would be no developers and without developers, we would have an even greater shortage of housing in this country, leading to even higher prices that would worsen the housing crisis.
There are some important things worth keeping in mind about developers. Firstly, private developers are responsible for about 97 per cent of Australia's housing stock. Second, 85 per cent of these private developers are small to medium size businesses, and not the large corporations many would assume.
Next, most development is about carving up existing, larger properties and creating several smaller ones. Smaller properties tend to be more affordable than large ones and so, it can be argued that developers are creating more affordable homes than would otherwise exist.
Lastly, developing property is risky. Many property developers have and will continue to fail and there are mums and dads — human stories — behind many of these failures. Profit is the reward for risk.
If you are a current buyer of a home, we all empathise with you and understand your pain and frustration. At the same time, let's not blame sellers or their agents for achieving prices that buyers are willing and able to pay — regardless of how crazy or unaffordable these prices appear.
If you are a seller, you shouldn't feel guilty at all about achieving the highest possible sale price. And buyers, when you do eventually buy, it is likely that at some stage, you will want to sell. When you do, I can guarantee that, you too, will want the highest sale price, and rightly so.
David Kaity is a property marketing strategist