Nine out of 10 NZ properties still selling for a profit

NOVEMBER 22, 2023

The resilience of the New Zealand real estate market has been highlighted by the latest CoreLogic NZ Pain & Gain report showing that in Q3 2023 92.6% of properties were selling for a profit[i].

The median profit of $285,000 in Q3 2023 was down from Q4 2021's robust $440,000, however, this is a strong result after the challenges of the past 18 months dominated by interest rate rises.

CoreLogic NZ’s Chief Property Economist Kelvin Davidson said, “The large majority of property resellers in the third quarter of 2023 got a price higher than what they originally paid, reflecting the fact that most people have held their property for several years."

He continued, "A relatively short hold period of one to two years means that they likely purchased at or near the peak of the market and are now selling in very different conditions."

Across New Zealand as a whole, properties that were resold for a gross profit in the third quarter of 2023 had been owned for a median of 8.1 years, which is in line with the average of the past year.

The only way is up

Kelvin Davidson said the latest resale performance data shows the wider property market has now found a floor. "For most property owners who have held for a ‘typical’ period of seven to eight years, resale profits are still likely, regardless of what is happening in the wider market over shorter periods.”

Keith Niederer, General Manager NZ, Raine & Horne, stressed that the CoreLogic research findings reaffirming the enduring reliability of quality, well-located properties.

“Real estate markets are highly correlated to the workings of the Reserve Bank of New Zealand, so it’s pleasing that the official Cash Rate (OCR) in on hold, while we also now have political stability with the general election now well and truly in the rear view mirror,” Keith said.

“Unlike other asset classes such as shares where returns are published daily, a well located home has the ability to weather investment cycles and can continue to produce decent long-term returns for their owners.”

For further information regarding the advantages of auctioning your property, please contact your nearest Raine & Horne office.