Resale gains on house prices have hit a record high, but there is a warning that the strong profits won't last forever.
Photo: RNZ / Cole Eastham-Farrelly
CoreLogic's latest Pain & Gain report, which compares a property's most recent sales price with the previous price, shows that 99 percent of properties resold in the past three months made a profit.
They showed the median gain on sales of $347,000, while the median resale loss was $20,000.
"The strength and resilience of the market reflects the support measures for the wider economy that were put in place by the New Zealand Government alongside very low mortgage rates, which have pushed property values sharply higher," CoreLogic chief economist Kelvin Davidson said.
He said "profits" had been accumulated over several years, not just during the past 12 months, when houses prices increased by about 25 percent.
"The majority of owner-occupiers would typically need to recycle the equity to afford their next purchase, which is likely to have also increased sharply in value."
However, he said headwinds for the property had been building in 2021 and included the introduction of tighter lending restrictions and tax changes.
This had resulted in house price growth slowing in recent months.
"Overall it wouldn't be a surprise to see the Pain & Gain figures soften a little over the coming quarters, but stay relatively strong going on past standards," Davidson said.
Across the country's main centres, Wellington was the strongest performer, posting a record high in the quarter with a median resale profit of $535,000.
The median gain in Auckland was $490,000 and $437,500 in Tauranga.
Hamilton and Dunedin had a resale gain was $360,000 or more, while the typical gain in Christchurch was $220,000.
Davidson said losses on property sales were often due to relationship break-ups.