The proportion of New Zealand homes reselling for a profit has dropped to its lowest level in almost 14 years, adding to evidence that vendors are holding properties longer to secure a gain.
Cotality NZ’s Pain and Gain Report for the June quarter found 86.9% of residential resales made a gross profit, down from 88.1% in the March quarter and the lowest share since the December 2012 quarter. The proportion of loss-making resales rose from 11.9% to 13.1%.
At the market peak in late 2021, more than 99% of resales were profitable.
Kelvin Davidson, Cotality NZ’s Chief Property Economist, said the slide reflects a housing downturn that has now run for more than four years, with national values still around 18% below their peak.
“While the share of profitable resales has fallen from more than 99% at the peak to 86.9% today, it’s been a gradual adjustment rather than the sharp deterioration we saw during the global financial crisis,” he said.
During the GFC, he said, the share of profitable resales fell from around 98% in mid-2007 to about 80% within two years – a faster decline than the current cycle, which Mr Davidson attributed partly to stronger bank serviceability testing and an absence of widespread mortgagee sales.
The national median gain was $280,000* in Q2, down from $292,000 in Q1 and well below the late-2021 peak of $440,000. The median loss increased from $55,000 to $60,000.
Hold periods remain the clearest divide between winners and losers. Properties resold for a profit in Q2 had been owned for a median of 10.4 years – a new record for a series dating to the mid-1990s, and up from 10 years in Q1.
By contrast, loss-making resales had been held for a median of just 4.3 years, meaning most were bought in late 2021 or early 2022, near the market’s peak.
“Some owners may be waiting longer for values to recover before selling, while elevated listings and subdued sales activity mean it can simply take longer to achieve a sale,” Mr Davidson said. “Economic and employment uncertainty may also be encouraging some people to stay where they are, while transaction costs and lending restraints can make moving less attractive.”
Apartments continue to bear the brunt of the downturn, with 45.2% reselling for a loss in Q2 – up from 39.4% in Q1 and the highest proportion since the September 2010 quarter. Standalone houses were far more resilient, with just 12.2% reselling for a loss (87.8% for a profit).
“Apartment values have generally recorded weaker capital growth over time and have fallen by around 6% over the past year, compared with about 2% for townhouses and broadly flat values for standalone dwellings,” he said.
“There’s no real evidence of fire-sales of apartments, but it’s also true that sellers are battling a bit in this current environment.”
Among the main centres, Auckland recorded the highest share of loss-making resales at 20.9%, followed by Wellington at 18.4%, Hamilton at 13.4%, Tauranga at 10.7%, Dunedin at 8.0% and Christchurch at 5.3%.
Median losses in Auckland and Wellington were $85,000, against a national figure of $60,000 – though long-term owners in both cities still recorded some of the country’s largest gains, with a median profit of $368,000 in Auckland and $311,750 in Wellington.
“Auckland and Wellington experienced significant value growth before the recent downturn, so owners who bought many years ago can still be sitting on substantial gains.
“Recent buyers have had a very different experience, particularly those who purchased near the peak and have needed to sell again within the last four or five years.”
Across all Q2 resales nationally, gross gains totalled $3.83 billion against $159 million in gross losses.
“Looking ahead, economic uncertainty remains high, listings are elevated and buyers generally have plenty of choice,” he said.
“Until those conditions change materially, it’s difficult to see resale performance improving significantly in the near term.”
- 86.9% of resales were profitable in Q2, down from 88.1% in Q1
- Loss-making resales rose from 11.9% to 13.1%
- National median gain: $280,000 (Q2), down from $292,000 (Q1)
- National median loss: $60,000, up from $55,000
- Median hold period for profitable resales: 10.4 years (a record high)
- Median hold period for loss-making resales: 4.3 years
- Apartments: 45.2% resold at a loss; houses: 87.8% resold at a profit
- Highest loss shares: Auckland (20.9%) and Wellington (18.4%)
- Total Q2 gross gains: $3.83 billion vs $159 million in gross losses
For agents, the widening gap between hold periods tells a clear story: vendors who bought near the 2021 peak and need to sell within the next year or two may still be facing a loss, particularly with apartments or in Auckland and Wellington.
Framing pricing conversations around realistic hold-period expectations – rather than short-term comparisons to the peak – can help vendors set achievable expectations and avoid drawn-out campaigns.
*All prices in NZD