Vendors making a median profit of $289,500 when selling their home

There’s been an increase in the share of vendors selling for a gross profit, although it’s still somewhat below the extraordinary levels seen during the pandemic.

In the final quarter of 2024, 91.0% of the properties that were sold across New Zealand achieved a higher price than the owner had previously paid, according to CoreLogic.

That was up from 90.1% the previous quarter, but down from the 99.0% seen during the pandemic.

Vendors who sold for a gross profit did so after owning their home for a median of 9.0 years. Their median gain was $289,500, compared to $279,000 the previous quarter.

Vendors who sold their home for less than they’d originally paid did so after holding the property for a median 3.0 years. Their median loss was $55,000 – the same as the previous quarter.

Comparing home type, vendor type and location

Drilling down, the share of profit-making resales varied based on home type, vendor type and location.

CoreLogic reported that 91.7% of houses sold for profit (up from 90.9% the previous quarter), while 71.5% of apartments sold for profit (up from 68.2%).

There was less variance in vendor type, with 91.3% of owner-occupiers selling for a profit (up from 90.8%), compared to 90.1% of investors (up from 88.9%).

However, there was significant variance based on location:

• 86.5% of homes sold for a profit in Auckland (compared to 84.1% the previous quarter).
• 90.8% in Hamilton (89.9%).
• 94.8% in Tauranga (90.9%).
• 90.6% in Wellington (90.0%).
• 94.4% in Christchurch (95.3%).
• 93.5% in Dunedin (92.2%).

Vendor conditions expected to improve

CoreLogic NZ Chief Property Economist Kelvin Davidson said the increase in the share of vendors selling for a gross profit reflects a gradual improvement in market conditions.

“While profits are down from the peak, most property resellers continue to see gains,” he said.

“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. However, with property values still about 18% below their peak and the overhang of listings keeping buyers in a strong position, selling conditions remain subdued.”

Looking ahead, Mr Davidson forecast that lower mortgage rates would lead to rises in property prices during 2025, which would strengthen the position of vendors.

“But any turning point for house prices won’t be sudden or strong, and lingering weakness in the labour market alongside an abundance of listings should mean finance-approved buyers continue to see good opportunities,” he said.