Over 96% of New Zealand Property Owners Profiting From Resales

More New Zealand homeowners are selling properties for a profit.

More homeowners are selling properties for a profit based on the buoyant housing market conditions over the past few years, according to new data from CoreLogic. 

In the first three months of 2017, 96.3% of all homes resold did so at a gross profit compared to their previous sale price, according to the CoreLogic March quarter Pain and Gain report.  Owners pocketed a median gain of $167,000 per sale, with almost $4 billion in profits realised nationwide.  

Meanwhile, the number of properties resold at a gross loss dropped from 4.2% to just 3.7% compared to the previous three months.  

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CoreLogic head of research Nick Goodall says strong, long term growth in national values is behind the reduction in properties reselling at a loss.  However, he noted the picture was more uneven at a regional level with some areas performing better than others.  

“The key point is the percentage of properties reselling at a loss is low, and continues to drop across the board.  As prices increase, it becomes less likely a property will sell at a loss. 

“But the market is not delivering the same gains for everyone, with some regions as well as apartment owners and property investors more likely to face a loss with resales,” Goodall says. 

Of the main centres, Christchurch had the highest proportion of properties resold at a loss in the first three months of the year at 7.9%, a slight increase from 6.9% in the previous quarter.  Dunedin had the second highest proportion of resale losses (2.7%), followed by Tauranga (2.5%), Auckland and Wellington (1.3%) and Hamilton (0.6%). 

Outside the main urban areas, regions which performed strongest included Kapiti and Masterton, with just 0.8% and 0.6% of resales incurring a gross loss respectively.  Parts of the Waikato region also had very low proportions of losses, due to their proximity to the Auckland and Tauranga markets.  

Overall, owner occupiers were much less likely to take a hit on resales than investors in the first three months of the year (2.9% compared to 4.7%).  Exceptions included Hamilton, Tauranga and Dunedin where there was little difference in loss-making resales between the two market segments. 

“Our analysis indicates investors occupy a riskier position in the market compared to owner occupiers, mainly due to the types of properties they buy and the parts of New Zealand they’re active in,” Goodall says.  

The report also found stand-alone houses were more likely to deliver profits than apartments in the first three months of the year, with just 3.4% of houses reselling at a loss compared to 7.4% of apartment resales


About CoreLogic

CoreLogic Australia is a wholly owned subsidiary of CoreLogic (NYSE: CLGX), which is the largest property data and analytics company in the world. CoreLogic provides property information, analytics and services across Australia, New Zealand and Asia, and recently expanded its service offering through the purchase of project activity and building cost information provider Cordell. With Australia’s most comprehensive property databases, the company’s combined data offering is derived from public, contributory and proprietary sources and includes over 4.4 billion decision points spanning over three decades of collection, providing detailed coverage of property and other encumbrances such as tenancy, location, hazard risk and related performance information.

With over 20,000 customers and 150,000 end users, CoreLogic is the leading provider of property data, analytics and related services to consumers, investors, real estate, mortgage, finance, banking, building services, insurance, developers, wealth management and government. CoreLogic delivers value to clients through unique data, analytics, workflow technology, advisory and geo spatial services. Clients rely on CoreLogic to help identify and manage growth opportunities, improve performance and mitigate risk. CoreLogic employs over 650 people across Australia and in New Zealand. For more information call 1300 734 318 or visit www.corelogic.com.au.

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