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Valocity head of valuations James Wilson reveals why some property values have dropped over the last quarter, plus his predictions for what’s ahead. Video / NZ Herald
Most homeowners are still making a profit on the resale of their home, but the tide is expected to slowly turn as prices begin to drop.
CoreLogic’s pain and gain survey indicates 99.1 per cent of properties resold in the three months to March (Q1 2022) made a gross profit or gain on the previous purchase price.
That was marginally down (99.3 per cent) on the last quarter of 2021 (Q4 2021).
CoreLogic NZ chief property economist Kelvin Davidson said the latest data was not showing any dramatic shifts yet, but change was coming.
“Given that most people have built big ‘paper’ gains over many years of ownership, it’ll take time for falling prices to have much effect on capital gains built up over several years of ownership.”
In dollar terms, the median resale profit dipped slightly to $406,000, from a record high of $435,000 in the last quarter of 2021.
Davidson said it was the second-highest profit in the 26-year history of this data series, and compared with a median resale gain of $233,632 in the first quarter of 2020.
“While the figures have softened, consistent with the wider market slowdown, the fall is only minor and it may be some time before we see more substantial declines in profit-making resales.”
Davidson said Auckland and Wellington had the biggest falls in the portion of properties resold for a gross profit, while Christchurch (99.5 per cent) and Dunedin (99.7 per cent) had no change quarter on quarter.
Hamilton and Tauranga saw gains, with all deals making a gross profit for the seller.