NIne percent of homes sold in the last quarter of last year went for a loss, including 29.5 percent of apartments. File photo. Photo: RNZ
People who bought a house at the peak of the market and now need to sell it are still generally doing so at a loss, new data suggests.
Corelogic's latest pain and gain report showed 9 percent of homes that changed hands in the last quarter of last year were sold for a loss, including 8.3 percent of houses and 29.5 percent of apartments.
In Auckland, the share selling for a loss was 13.5 percent, in Wellington it was 9.4 percent and Dunedin 6.5 percent. Christchurch was 5.6 percent.
Across the country, the number of homes being sold for a loss dropped from almost 10 percent the previous quarter, but is still well up on the Covid boom period where it was less than 1 percent.
Those who made a loss lost a median $55,000 and those who made a gain made a median $289,500, up from $279,000 in the previous quarter. That is down from the $440,000 recorded in late 2021 but is still more than anything before the last quarter of 2020.
The defining factor appears to be how long people have held a property. Properties that made a gain had been held for a median nine years, compared to just three years for those making a loss.
Corelogic economist Kelvin Davidson said the hold period was key. "Median profits probably still look quite large to people but the hold period means gains build up over time."
Some investors had been holding properties longer because of the slower housing market, he said.
He said any gains made would usually go into the purchase of a new property.
"The latest increase in the frequency of resale profits supports other indicators that the market may have found a floor, largely due to recent mortgage rate falls."
But he said with property values still down about 18 percent from the peak, conditions were still subdued.
"Things are improving a little bit. This is consistent with what we are seeing elsewhere in the housing market. It's not necessarily rising but it has pretty much stopped falling, signalling a potential turning point in the next few months."
He said slow change seemed to be happening across the board.
Davidson said apartments usually suffered more frequent losses. "They tend to grow more slowly so it doesn't take as much to go wrong for you to lose money. Even if you've held for nine or 10 years you might have had less capital growth and if you something goes wrong you find yourself under water."
He said they also tended to be owned by investors who could be more "hardnosed" about accepting a loss.
From here, he said, lower mortgage rates were likely to continue to have an upward influence on the market but there were still lots of listing for buyers to choose form and the labour market was soft.
"Things are starting to turn around but it's unlikely to be a dramatic boom either, more a subdued upturn."
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