Patient property owners reaping profits

New research from CoreLogic has found that 93.1% of vendors who sold their property during the June quarter did so for more than the original asking price and enjoyed a median gross profit of $290,000.

This compares to the record-highs achieved during the December 2021 quarter, when 99.3% of vendors made a gain and the median profit was $440,000.

CoreLogic found a strong correlation between the amount of time someone had owned a property and the likelihood of selling it for a profit.

Properties that were sold for a profit in June had been owned for a median of 8.4 years, while 60% of those that were sold for a loss had been owned for 1.8 years.

CoreLogic Chief Property Economist Kelvin Davidson said someone who’d held a home for only 1.8 years would’ve bought it in the middle of 2021, when interest rates and inflation were much lower than today. “Presumably, many of these resellers had intended to hold for longer, but perhaps due to changed personal circumstances they had to sell,” he said.

City-by-city breakdown

• Auckland: median profit time = 8.8 years, median loss time = 2.1 years.
• Hamilton: profit = 7.5 years, loss = 1.6 years.
• Tauranga: profit = 8.0 years, loss = 1.7 years.
• Wellington: profit = 10.2 years, loss = 2.4 years.
• Rest of North Island: profit = 8.1 years, loss = 1.7 years.
• Christchurch: profit = 8.7 years, loss = 1.6 years.
• Dunedin: profit = 8.5 years, loss = 1.5 years.
• Rest of South Island: profit = 7.4 years, loss = 1.6 years.

Houses v apartments, owner-occupiers v investors

CoreLogic found that houses (93.8% sold at a profit) outperformed apartments (74.0%).

Similarly, owner-occupiers (93.8%) were more likely to sell for profit than investors (92.6%).

“There is a tendency for apartments to be resold at a loss more often than houses, perhaps reflecting a greater proportion of investor ownership, but we’re not seeing signs of apartment owners abandoning ship,” Mr Davidson said