The property market has bounced back from the impacts of the COVID-19 pandemic, with profit-making resales increasing nationally to 96.8%, according to CoreLogic.
CoreLogic’s latest Pain and Gain Report revealed that median national resale gain increased from 96.2%, or $220,000, in Q2 2020 to $229,000 in Q3 2020. It was not far short of the record peak of $233,000 in Q1 2020.
Median resale loss, or “pain”, also decreased from $22,500 in Q2 to $20,000 in Q3 – the smallest median resale loss in two years.
“This report really confirms what we know is going on in the housing market more generally. Prices have rebounded strongly from COVID and are continuing the upward trend they had before the pandemic hit,” said CoreLogic senior property economist Kelvin Davidson.
In Hamilton and Wellington, around 99% of resales in Q3 were made above the original purchase price, with Tauranga and Dunedin at 98%.
Auckland and Christchurch also showed improvements in the third quarter – with Auckland’s share of property resales made for a gross profit rising slightly from 94.6% in Q2 to 95%, and Christchurch from 90.9% to 92.4%.
Houses made the most significant gains with 97.3% of house resales made at a gross profit in Q3, which was as high as that figure has been since mid-to-late 2007. Meanwhile, 86.1% of apartment resales in Q3 were made above the original purchase price, down slightly from Q2’s figure (87.6%), but still relatively high by past standards.
“Overall, it’s been remarkable how quickly the sentiment in the property market has turned from pessimism back in April and May to more confidence now. Low mortgage rates and the tight supply/demand balance are feeding into renewed growth in property values that we’re seeing in our resales data,” Davidson said.
“There’s also no evidence that any particular part of the country is really suffering. The lack of any real regional variation highlights that things are pretty strong across the country.”