Most home sellers are making a profit

The buoyant housing market is putting dollars in the pockets of 96.3% of New Zealand home sellers according to CoreLogic

Most home sellers are making a profit
The buoyant housing market is putting dollars in the pockets of 96.3% of New Zealand home sellers according to CoreLogic.

The figures are based on the first three months of 2017 and show that almost all New Zealand homeowners made a gross profit from resales with a median gain of $167,000. Just 3.7% made a gross loss compared to 4.2%.

“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,” said CoreLogic head of research Nick Goodall.

It means a collective boost of almost $4 billion for homeowners nationwide but as with most elements of the Kiwi housing market, there are regional variations.

“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,” he added.

Christchurch homeowners are most likely to make a gross loss on resales (7.9% of all properties resold, up 1 percentage point from the last quarter of 2016) followed by Dunedin (2.7%), Tauranga (2.5%), Auckland and Wellington (1.3%) and Hamilton (0.6%).

Meanwhile, Kapiti and Masterton had among the lowest share of homes sold at a loss (0.8% and 0.6%) respectively. Owner occupiers are also more likely to make a profit except for some areas including Hamilton, Tauranga and Dunedin.

Apartments were more than twice as likely to sell for a loss than stand-alone houses (7.4% vs. 3.4%).

“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.