Data shows properties resold at a loss highest in 14 years during September quarter

Detailed summary

The proportion of New Zealand properties resold at a loss reached its highest level in 14 years, figures from Cotality show. Cotality New Zealand’s Pain and Gain Report revealed…

The proportion of properties resold at a loss in the third quarter was the highest since 2012, according to Cotality. Photo / 123rf

The proportion of New Zealand properties resold at a loss reached its highest level in 14 years, figures from Cotality show.

Cotality New Zealand’s Pain and Gain Report revealed 15.8% of properties sold in the September quarter did so for less than their previous purchase price – the highest level since the third quarter of 2012.

Meanwhile, 84.2% of residential properties were resold for a gross profit, with a median gain of $270,000.

Time in the market remained a key factor, with properties resold at a loss having been owned for a median of 4.5 years, compared with 10.4 years for those resold for a gain.

Cotality NZ chief property economist Kelvin Davidson said owners who bought more recently had generally been more exposed to the market downturn.

“Most buyers would not have purchased with the intention of selling again so soon, but circumstances might have worked against them, such as a family or job change, or financial strain brought on by previously sharp rises in mortgage rates,” he said.

Davidson said the deterioration in resale conditions remained gradual, with more than four in five property resellers still making a gross profit.

“The share of profitable resales has taken four to five years to ease from around 99% at the peak to 84.2% now,” he said.

Opening of the article, excerpted from NZ Herald. To read the rest, open the article on the publisher's site.