Nearly one-in-10 property sellers makes a loss
Thursday, 13 February 2025
Fewer people who sell their homes are making a loss, suggesting market conditions are starting to improve, CoreLogic says.
The property research company’s latest Pain and Gain Report shows 9.0% of existing properties sold over the final quarter of last year went for less than the seller bought them for.
That was down from 9.9% in the previous quarter, but it was low compared to the post-Covid boom from late 2020 to early 2022 when over 99% of resales were for a profit.
While the median resale loss remained unchanged at $55,000, the median resale profit increased to $289,500 from $279,000 in the previous quarter, according to the report.
CoreLogic chief property economist Kelvin Davidson said the data suggested resale conditions were gradually improving, and that resellers might be regaining ground as profits grew.
Resale profits were down from the peak of $440,000 in late 2021, but most property resellers continued to see gains, with the current resale profit higher than anything before late 2020, he said.
On a regional basis, loss-making resales were down in all the main centres, apart from Christchurch where they crept up to 5.6% from 4.7%, the report showed.
Auckland had the highest proportion of loss-making resales at 13.5%, down from 15.9%, while in Wellington they declined to 9.4% from 10%.
Tauranga had the lowest share of loss-making resales at 5.2%.
Davidson said the length of time a property was held played a key role in resales, and even in a downturn anybody who had owned property for several years tended to make a profit.
Properties that sold for a profit in the final quarter of 2024 had been held for a median nine years, up from 8.6 years the previous quarter.
“It may reflect weaker housing sentiment and greater caution, with owners opting to ride out the current soft patch before testing the market.”
But the increase in the frequency of resale profits added support to the idea the market might have found a floor after a prolonged downturn, and that was largely due to recent mortgage rate falls, he said.
“With property prices still about 18% below their peak and the overhang of listings keeping buyers in a strong position, selling conditions remain subdued.”
In the coming year, lower mortgage rates would push up house prices to some extent, and that would strengthen the position for property resellers, he said.
“But any turning point for prices won’t be strong, and lingering weakness in the labour market and an abundance of listings should mean finance-approved buyers continue to see good opportunities.”
Meanwhile, Realestate.co.nz has released new data showing the popular belief that property prices doubled every decade was true for some parts of the country, but not all.
The listings website analysed average asking prices from the start of 2015 to the end of 2024, and found they more than doubled in nine of 19 regions.
Gisborne had the biggest increase with prices up 138.5% to $677,570, followed by Manawatu/Whanganui, up 128.6% to $626,491, and Central North Island, up 126.6% to $791,100.
The other regions where prices doubled were Southland, Coromandel, Wairarapa, Hawke’s Bay, Central Otago Lakes District, and Waikato.
Of the remaining 10 regions, all had price increases of at least 50% over the decade, except for Auckland where prices rose by only 29.5% to $1.09 million from $846,730.
While the average national asking price did not double, it did increase by 60.3% to $892,579 in 2024 from $556,931 in 2015.
Realestate.co.nz spokesperson Vanessa Williams said the data signalled that despite market fluctuations, which could feel unsettling, prices did grow strongly over time.
“How much they've grown depends on where you are across the motu and what part of the property cycle we are in.”
But even with recent price drops, houses were worth much more than they were a decade ago, she said.
“Like any investment, property is a long game, and those who have the luxury of staying in the market are most likely to reap the gains.”