A number of transactions in Auckland stood out for the amount of money the seller had lost, Cotality chief property economist says. Photo: RNZ / Kate Newton
Sellers who bought their houses at the peak of the market and have since sold have lost more than $1 million in some cases.
House prices remain about 15 percent below their post-Covid peaks.
While that is positive for the first-home buyers who are getting into the market at record percentage levels, it is hard for some sellers who have bought houses within recent years and then have to sell.
Cotality chief property economist Kelvin Davidson said there were a number of transactions that stood out for the amount of money the seller had lost.
Kelvin Davidson Photo: SUPPLIED
One house, on Eric Price Ave in the Auckland suburb of Takapuna, was owned for just over three years before it was sold in December last year for $5.15 million, a loss of $1.23m from what the seller had paid.
Another house in Claude Road, Epsom, was held for just over a year before it sold for a $1.05m loss in 2022.
A Westmere house lost $830,000 after being held for two-and-a-half years and an Oneroa property $800,000 after being held for more than three.
Davidson said there were a few factors in common with all the bigger losses.
They were all in Auckland and were high-value properties.
"If you start off with a high-value property, any given percentage drop in price will translate into a bigger dollar value.
"So it's no surprise that those properties are top-end. If you applied a blanket 10 percent or 20 percent fall across all properties, one that started off at $500,000 is going to have a smaller dollar loss."
He said Auckland had been a weak market for a few years.
"That has been a market where people if they've had to buy and sell in a short period of time will have seen some chunky losses."
He said Wellington had recorded similar losses in percentage terms, but the houses started at a lower price.
Cotality data shows that the second quarter of this year, 89.4 percent of sellers made a gross profit - 10.6 percent made a loss. This does not include the cost of the sale, such as real estate commission.
But in Auckland, the number losing money increased to 15.9 percent. In Tauranga, it was 13.2 percent and Wellington 11.9 percent.
Christchurch had the smallest proportion of loss-making sales, at 4.9 percent.
The median loss was $52,500.
'Financial grind from all sides' - Homeowner
One homeowner who earlier spoke to RNZ said he was waiting it out so he could sell his west Auckland house that was bought at the peak of the market.
He and his family bought the house in 2021 for $750,000. A the time it had a council valuation of $790,000. The CV has since fallen to $670,000 and he has been told he would be lucky to get $650,000.
He had also experienced sharp increases in mortgage payments as interest rates rose, as well as much higher council rates and body corporate payments.
"It's what I call the triple whammy: falling property value, rising holding costs and relentless mortgage pressure.
"This isn't just a market correction - it's a financial grind from all sides," he said.
He said he never planned to buy again.
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