The overwhelming majority of sellers are making a profit when they sell their home in Newcastle and Lake Macquarie, with 98.1 per cent earning gains in the three months to June.
However, a "robust spring selling season" could lead to a softening of capital growth, how much a property increases in value over time, according to CoreLogic head of research, Eliza Owen.
CoreLogic's Pain and Gain report, which analysed house and unit sales in the three months to June, reveals sellers in the region earned a median gross profit of $396,000 after holding their property for an average of 8.9 years.
However, Ms Owen said profitability in the region is softening.
"Recalling back to value performance across the region, the Newcastle and Lake Macquarie market was seeing a little bit of softening in the capital growth trend," Ms Owen said.
"Home values are still 0.3 per cent below the record high in April 2022, so the trajectory for this market is you had a pretty sharp short decline when interest rates started to rise from May 2022.
"Since then, home values have been slowly recovering but are not quite back at that record high."
The value of profit-making sales in the region hit a record high in April 2022 before the first interest rate rise, with sellers earning a median gain of $448,000.
"Since then we haven't quite seen a recovery in profits from resale and homes that sold at a loss in the Newcastle and Lake Macquarie region in the last quarter were probably bought very recently towards the peak of that market," she said.
Ms Owen said the rate of profit-making sales is expected to continue to climb in the September quarter, in line with rising home values.
However, an uptick in the volume of homes listed for sale in spring could lead to capital growth softening further in the September quarter.
"If we look at the rolling three-month growth trend, the market as a whole rose 0.9 per cent through winter which is down from the 1.3 per cent rise in the three months to May," she said.
"The capital growth trend has been softening and this might be exacerbated through spring because it looks like a pretty strong spring selling season.
"You have a lot of people looking to sell their properties, so that is going to test the depths of demand, which, at the same time is being hampered by affordability constraints, high interest rates and high cost of living pressures.
"Combined with what is looking like a robust spring selling season, the depth of buyer demand to deliver higher and higher profits may be tested in the coming months."
Loss-making sales slightly up
According to the report, 1.9 per cent of homeowners in Newcastle and Lake Macquarie sold at a loss in the June quarter.
Sellers who lost money on their home sold at a median loss of $54,500 after holding their home for an average of 2.6 years.
The figure is slightly up from 1.8 per cent in the March quarter.
"1.9 per cent is a very low rate of loss-making sales when you consider the national figure is 5.5 per cent," she said.
"Even though the region remains very profitable, there has been a light deterioration in profitability and there has certainly been a bit of a dent to the median gains from resale."
Sellers were more likely to make money selling a house than a unit.
"Looking at Newcastle and Lake Macquarie, the rate of loss-making was higher for units at 2.9 per cent in the June quarter," she said.
"Of the units that sold at a loss, they were only held for a median of 2.2 years whereas units that made a profit in the quarter, which was 97 per cent of units sold, they were held for a longer period of 7.4 years at the median level."
For houses, 1.6 per cent sold at a loss in the June quarter.
Nationally, Australian property delivered a median nominal gain of $285,000 from resales in the June quarter, marking a record high.
The report showed 94.5 per cent of national property sales resulted in a gain during the three months to June, driven by national housing values hitting fresh record highs each month since November last year.
