- House sale profits have almost halved in three years, with median resale profit dropping 41% to $256,000.
- Median resale loss jumped 175% to $55,000, with 10% of properties reselling at a loss.
- Rising interest rates and construction cost hikes, along with Auckland’s flooding issues, have exacerbated losses.
House sale profits have almost halved in the last three years while losses more than doubled, according to new research by OneRoof and its data partner Valocity.
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The analysis of residential property sales found that the median resale profit in the third quarter of this year dropped 41% to $256,000, from a high of $435,000 at the peak of the market in 2021.
The median resale loss jumped 175%, from $20,000 to $55,000, over the same period.
The percentage of properties reselling at a loss has also risen steadily, from 1% in the fourth quarter of 2021 to 10% in the third quarter of 2024.
While the median loss for Q3 2024 was $4000 off the peak, recorded in the second quarter of 2023, the median resale gain was the lowest it had been in four years. In fact, the median gain is only $30,000 above what it was five years ago, highlighting the brutal impact the recent downturn has had on house prices.
However, some properties have done better than others this year. OneRoof editor Owen Vaughan said: “Generally, the longer the hold period the better the chances of a profit, with the top 10 profits all from properties that had been owned by the vendors between 14 and 30 years. Renovations also helped.
“Properties that resold for a loss tended to have short hold periods and were for the most part the victims of higher interest rates and falling prices.”
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A mansion in Mahurangi, on Auckland’s northern fringe, sold for a gross loss of $800,000 this year after being owned for just two years while the owner of a renovated villa in Auckland’s Freemans Bay resold it for $770,000 less than what he paid 18 months earlier.
The investor in Freemans Bay had initially planned to transform the heritage mansion but the numbers didn’t work, so he pulled the plug on the project.
The only house not in Auckland to make the top 10 losses list was 832 Blairlogie-Langdale Road, Masterton. The owners of that property lost $875,000 just 2.7 years after buying it.
Valocity senior research analyst Wayne Shum said: “If you purchased property in 2021 or the beginning of 2022, it was the peak of the market and there’s a high likelihood that if you sell it today, you’ll be selling it for less.”
An Italianate mansion on Auckland's prized Paritai Drive sold for $21.84m in March this year. The property got this year's biggest sale price and biggest gross profit. Photo / Supplied
A lakefront house on Lake View Road, Takapuna, Auckland, sold in July for $10m, earning a gross profit of $8.8m. Photo / Supplied
Almorah Road, in Epsom, Auckland, was brought to life by architect Lawrence Sumich and sold for $7.675m in January, earning a gross profit of $6.525m. Photo / Supplied
Shum said higher borrowing costs have forced some sellers to offload properties at a loss, while developers also grappled with skyrocketing construction expenses.
The largest recorded gross loss was on a property on Tennyson Avenue, in Auckland’s Takapuna. It resold for $1.01 million less than its purchase price after a hold period of just under two years. The property was surplus to requirements but was ripe for development.
Rising interest rates, construction cost hikes, and external challenges have exacerbated losses in 2024, Shum said.
Auckland’s flooding issues and new Watercare restrictions on new connections have also come to bare, preventing developments in certain areas until 2035-2040, blindsiding some buyers and developers.
Ray White Manukau director Tom Rawson told OneRoof some residential properties bought for development had now become non-developable for over a decade. “Last year’s floods remodelled flooding risks in Auckland and what was prime development land is now considered high-risk, leading to diminished interest from developers in those residential properties,” he said.
“Watercare’s new restrictions have also had a huge impact. Some owners had been sitting on sections and the kids have left home and they thought they would sell to a developer but that’s not as attractive anymore.”
However, some properties have done better than others this year, but they have been held for long periods, with the top 10 profits all from properties that had been owned by the vendors for between 14 and 30 years. They were also in particularly in high-value suburbs and locations.
The year's biggest resale loss was a development site on Tennyson Avenue, in Auckland's Takapuna. it was bought in 2022 for $4.75m and resold in 2024 for $3.74m. Photo / Supplied
A five-bedroom mansion on Ridge Road, in Mahurangi East, on Auckland's northern fringes, resold for a gross loss of $800,000. Photo / Supplied
A historic property on Hepburn Street, in Auckland's Freemans Bay, sold in September for $3.08m - a gross loss of $770,000. Photo / Supplied
An Italianate mansion on Paritai Drive, one of Auckland’s wealthiest streets, topped the winner list, with an $11.3m gain, reselling for $21.8m after 14 years. The property, which was sold by New Zealand Sotheby’s International Realty agent Paul Sissons, had not been on the open market since it was built in 2002, with the outgoing owners paying $10.5m for it in a private deal in 2009.
“It’s an incredible property. The build alone, at $6000 per square meter, would now cost at least $5 million and that’s not including the land,” Rawson said.
Shum added: “Some of these property owners have gone through the Asian financial crisis, the dot-com bubble, September 11 and the current market cycle and they’ve still seen gains.”
A luxury pad on Lake View Road, in Takapuna, came in at number two on the highest resales list. It had been held for nearly 25 years and resold for $10m, generating a profit of $8.8m. Precision Real Estate’s Andrew Dorreen said it was the first time the property had been sold after being built new in 2002. He described it as a “sublime waterfront property”.
The only home to make the top 10 resale gains list outside of Auckland was 61A Ocean Beach Road in Mt Maunganui. On just over 1600sqm of prime beachfront land, the owners made just over $5.2m on the three-bedroom two-bathroom property they held for 30 years.
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